Cancelling Your Home Purchase Contract – How, When, And Why
While we always enter escrow with the goal of assisting our clients with completing their home purchase, there are rare occasions when our buyers need to cancel their purchase contract. There are ways that this can be done with minimal risk and liability. In this article, we discuss when and why cancelling your home purchase contract may be a good idea, and how it should be done.
You’ve spent months working with your very knowledgeable Esquire Real Estate Brokerage, Inc. agent or broker to find your new home. You’ve spent countless hours filtering through listings, attending open houses and private viewings, and have had countless discussions with your friends and family about what you want and need in a new home. You found “the one”, made an offer, beat out other buyers in a bidding war, and are ready to finally seal the deal on your dream home. But getting your offer accepted is just another hurdle, albeit a significant one, in the process of buying a home. Next comes your due diligence process to make sure that this house doesn’t just feel like the one, it actually is the one.
The due diligence process, also known as your contingency period, involves making sure you are satisfied with the home and can complete the purchase. This process involves several “contingencies” that are built into the process. One of the most important contingencies is the physical inspection contingency, which essentially entails hiring experts to inspect the home to make sure you are satisfied with the physical condition of the home. Another contingency is the seller disclosure contingency, which requires the seller to disclose various aspects of the home, including any material defects that they know about, and your approval of those disclosures. The loan and appraisal contingencies are also built in to ensure that you can qualify for and obtain the loan that you need in order to complete the transaction.
An effective and knowledgeable agent will guide you through the process to make sure you are comfortable with all the aspects of the home and purchase process before exposing you to any liability. The contingency period is your opportunity to satisfy yourself that you indeed would like to move forward with the purchase, before exposing yourself to liability for breaching the contract.
Sometimes, the due diligence process will give rise to an issue that will lead you to decide that completing the purchase is not in your best interest. Maybe the physical inspections revealed a significant water leak and mold infestation, or an issue with the foundation that will cause tens of thousands of dollars to repair. Or maybe the appraisal for the property came in significant below your offer price, or you experienced a sudden and unexpected change in employment that makes it impossible to qualify for the loan you need. In these situations, cancelling your home purchase might be your best option.
At Esquire Real Estate Brokerage, Inc., we strive to make sure that our buyers are satisfied during the contingency period by making sure that all necessary aspects of the home are inspected, seller disclosures are reviewed in detail, and the loan is secured, all within the short contingency periods prior to effectuating the purchase. Sometimes, that means discovering issues that are so significant that our buyers decide not to move forward with the purchase. While it is always our goal to close the deal, it is also our goal to make sure that if there are roadblocks to closing the deal, they are discovered within the due diligence period so that our buyers can cancel the deal and obtain a full refund of their deposit for the purchase.
Selecting an agent and brokerage to represent you during the process is not just about working with someone you like or know on a personal level. You need someone who will make sure you are protected in the worst case scenario. With attorneys overseeing every transaction, Esquire Real Estate Brokerage, Inc. provides that assurance.
For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at firstname.lastname@example.org.