Home Buying in Jersey City>Question Details

Beveleighc, Home Buyer in West New York, NJ

what are the financial costs of breaking a property contract?

Asked by Beveleighc, West New York, NJ Tue May 1, 2012

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That's a complicated question.
It depends on where you are in the process and what your contractual contingencies are. Your attorney is the best to guide you here.
If you are still in attorney review, you can walk away without any cost to you and get back your good faith deposit (if you put one down.)
If you are out of review and you just cannot meet a contingency, then there is no financial cost to you (unless your contract states otherwise.)
If all contingencies have been met and you are waiting to close, you can be sued for specific performance by the sellers.
If you are thinking of breaking your contract, you need your attorney's advice. As you can see, there are a lot of questions that need to be answered that only you, your attorney and your agent know the answers to.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Wed May 2, 2012
I need help with this too! Thanks. BTW, if anyone needs to fill out a TREC form property, I found a blank form here.
Flag Mon May 11, 2015
A contract can be cancelled for any reason as long as both parties agree to cancel the contract. If the seller doesn't agree to cancel the contract and there is no contingency in the contract to justify the cancellation, there is a good likelihood that you will be sued for specific performance. At the very least you can expect to loose your deposit plus legal fees incurred by the seller to bring suit against you.
0 votes Thank Flag Link Tue May 1, 2012
If you do not have a contingency you can invoke, expect to (at least) lose your deposit. There is always a risk of being sued for specific performance and losing even more if the case goes against you (as it could). In the other hand, I feel the laws are a bit skewed toward the little guy, the buyer, but not enough so that a flagrant case of buyer's remorse will get you out of trouble. You need to consult an attorney before backing out.
0 votes Thank Flag Link Tue May 1, 2012
This sounds like a great question for your attorney. Here in New York, we use attorneys on all real estate transactions and we real estate and mortgage professionals defer such questions to the attorneys.

Breaking a contract to purchase or sell a home is a very serious matter. Consult your attorney for the best guidance.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue May 1, 2012
It kind of depends on a lot of factors. How far along are you in the process. If you are within the three day 'attorney review' period, then nothing. If you did a home inspection, and issues were brought forward that are so concerning to you that you no longer want the house, then probably nothing or very little. But, if you are just having buyers jitters, and you want out for no particular reason, then the consequences could be serious. You could lose your deposit. Or you could get sued. I hope you are using a realtor and an attorney. Talk to both of them about your particular situation to make sure you know exactly what the consequences will be in YOUR particular situation.
0 votes Thank Flag Link Tue May 1, 2012
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