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When You Can Back Out of a Real Estate Purchase Agreement?
A real estate purchase agreement is a legally binding contract. Once signed, both the buyer and seller are generally expected to carry through with the sale. However, there are certain situations in which one party can back out without facing legal or financial penalties. These exceptions are typically tied to specific conditions in the contract and must be carefully followed to avoid breach. An experienced Fort Lauderdale, FL real estate attorney can advise you on your right to withdraw from a real estate purchase agreement.
Under What Circumstances Can a Buyer or Seller Withdraw From a Real Estate Purchase Agreement?
Buyer’s Right to Cancel Under Certain Contingencies
Most real estate contracts include contingency clauses that protect buyers. For example, a financing contingency allows a buyer to cancel the agreement if they cannot secure a mortgage loan by a certain deadline. An inspection contingency gives the buyer the opportunity to professionally inspect the property and withdraw from the deal if significant issues are discovered, such as foundation problems or safety hazards. In some cases, an appraisal contingency is included, which permits the buyer to cancel the purchase if the home’s appraised value is lower than the agreed price and financing cannot be approved. These contingencies are only valid within specific timeframes outlined in the contract, and the buyer must act promptly to exercise their rights.
Seller’s Right to Back Out
Sellers have fewer legal options to walk away from a signed agreement. They may back out if a buyer fails to meet contractual obligations, such as paying earnest money or securing financing within the required timeframe. In some cases, a seller may include a contingency that allows them to cancel the agreement if they are unable to find a new property to purchase. Another option is for both parties to mutually agree in writing to terminate the agreement. However, a seller who simply has a change of heart without a valid reason under the contract may be liable for breach and could face legal consequences.
Call a Fort Lauderdale, FL Real Estate Lawyer
Real estate transactions can be complicated, and misunderstanding your rights under a purchase agreement can lead to costly mistakes. If you are considering backing out of a deal or have concerns that the other party might, speak with the experienced Broward County, FL real estate attorney at The Elliot Legal Group, P.A. by calling 754-332-2101 to schedule your initial consultation.
