Home Buying in Newton>Question Details

NeedAHomeNow, Home Buyer in Somerville, MA

When you make an offer on a house and it is accepted can the buyer legally back out of the offer?

Asked by NeedAHomeNow, Somerville, MA Tue Apr 8, 2008

My Fiancé and I just lost a house because we were unable to obtain a second visit, which would have been followed up by an offer. If we instantly loved a home, but wanted to go back with family or someone who knows the value of a home, are we legally allowed to back out of the offer if we noticed things we didn't like the second time around? We would most likely lose a deposit, right?
Thank you for your help.

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Hi,
It doesn't seem as though you are using a buyer agent. A standard contract to purchase gives you two opportunities to end the contract without losing your deposit. A. a failed home inspection : you will have the opportunity to have a home inspection (normally a 7-14 day period after acceptance). If you are unsatisfied with the inspection for any reason you can cancel the contract without losing your deposit.
B. Mortgage contingency: If you for some reason can not get financed by your lender before the specified date on the contract to purchase, you can cancel the deal. In most cases you must provide a letter from the bank explaining the reason for refusal.
Any other reason can be written into the original contract to purchase but does not need to be accepted by the seller. Best of Luck!--Mike
0 votes Thank Flag Link Tue Apr 8, 2008
I would not ask a family member "who knows the value of a home" to go back with you. It's kind of a heavy burden to place on a family member. What if they talked you out of buying the home (which is the safe thing to do) and you never saw anything you fell in love with again? A family member may have their own biases. What if the home you like is a ranch and they own a colonial?

However, they only way you are guarranteed to get you deposit back if your family member didn't like it is to make to the offer subject to that specific family member seeing the home by a certain date.

I'd make the offer subject to a professional home inspection. Get several reccommendations. Find out what kind of inspection they do. If I was buying the home, I'd want an inspector who took digital photos of problem areas in addition to a written report. If there's something you already suspect is going to need work, also make the offer subject to having a contractor who does that kind of work inspect & give you a written estimate of what it'll cost to fix it. Home inspectors aren't allowed to quote price of repairs. If the home inspector identifies a problem, get a contractor to look at the problem.

After identifying the problem, ask the Seller to address it, or use the issue to withdraw your offer and get your deposit back.

The key to getting your deposit back is to stay within the home inspection date on your offer.
0 votes Thank Flag Link Mon May 12, 2008
I recommend making your offer contingent upon "buyers satisfactory review of inspection report" This is usually accepted by the seller, and if you pull out and ask for your deposit back, it is pretty much impossible for the seller to argue that you were, in fact, "satisfied." Ask your realtor, or your atty if you are not using a realtor, but this is usually a pretty guaranteed way out if you need it.
0 votes Thank Flag Link Fri Apr 11, 2008
Always make your offer contingent upon inspection to give yourself an out. That gives you time to get a second or third opinion. It is also a good idea to use a Realtor to represent you who can protect your interest.
0 votes Thank Flag Link Tue Apr 8, 2008
Not sure why your agent could not get you back in for that second showing ... Perhaps the listing agent had another buyer lined up and didn't want to bother with another deal that might mess it up which is completely unprofessional. Just out of curiosity did the agent you were working with happen to rep the seller?

This is usually how the process works:

- See a property in person and identify it as the one you want to buy
- Your buyer agent helps you identify an offer price based on local sold comparables and neighborhood data, and they walk you through your contingency options. One of those contingencies is a home inspection ( i recommend you always put this contingency in the deal that way if you have the inspection by a professional - of which you must be let back in the property to conduct - and he/she finds issues exceed your aggregated amount you can walk on the deal without losing your first good faith deposit
- You make the offer. There is usually some negotiating.
- Offer signed by both parties
- At this point you would conduct your inspection. So here is your opportunity (as asked in your Q) to enter the property (again) with a professional and make sure everything with the property is in order. You would also exercise some other contingencies during this stage.
- You go to Purchase and Sale - second contract - review, sometimes negotiate and sign.
- Between this stage and the closing is when you would obtain a mortgage commitment from the bank (if you are financing).
- Closing

** Basically, the only way you legally have the right to re-enter the property after the offer is signed is a) if you have negotiated site visits into the contract, or b) if you have an inspection contingency. Otherwise the seller doesn't have to let you back in. If for whatever reason after the offer is signed the seller simply lets you back into the property to take a look and you "don't like what you see" (not related to inspection) and you want to back out of the deal, yes, you would lose your good faith deposit because at that point you would have defaulted on an executed binding contract.

I think i know why you are asking this questions and if i could give any advice it would be to not get pressured into making an offer prematurely ( out of fear of losing the chance to make a bid) and then trying to work backwards (get that second showing) unless your agent has educated you on the risks and is a real savvy negotiator ( i could teach you a couple tricks).

Anyway, to eliminate any conflicts of interest and to ensure your best interests are protected, make sure you don't use an agent who represents the seller (i.e the person who's name and number is on the listing or conducts the open house) in the transaction. It is virtually impossible for them to represent you and the seller equally - think about it - so someone loses out, usually the buyer.

Good luck!!
0 votes Thank Flag Link Tue Apr 8, 2008
When I write an offer, there are usually contingencies attached which would return the buyers deposit, for a variety of reasons after inspection.
Web Reference: http://www.ErikHook.com
0 votes Thank Flag Link Tue Apr 8, 2008
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