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Canceling a home purchase agreement

On Behalf of | Aug 6, 2019 | Residential Real Estate

Typically, a person in Delaware can back out of a home purchase after an offer has been accepted. However, when and how someone can rescind an offer depends on how the contract was structured. It also hinges on whether all parties have signed the document. If it has, it may be necessary to go to mediation to resolve the matter if a seller doesn’t willingly allow the deal to be canceled.

In most cases, a purchase offer comes with a variety of contingencies. For instance, a buyer may say that the deal is contingent on securing financing or the results of a home inspection. If a particular condition isn’t met, it is usually acceptable to back out of a home purchase without forfeiting any earnest money. Earnest money is a deposit a person makes to prove that he or she will make a good faith effort to buy the property.

Buyers could lose more than their earnest money if they choose to not purchase a house without contingencies. Sellers could take them to court to demand that the sale close as scheduled. Ideally, a prospective homebuyer will be upfront with the seller if any problems arise. This could make it easier to mitigate the damage caused by not honoring a purchase contract.

People who are serious about purchasing residential real estate will ideally do so with the help of an attorney and a real estate agent. These professionals may be able to explain common contract terms, such as a contingency. This may make it easier for buyers to understand what they are agreeing to and what could happen if they later decide to not follow through with the deal. Lawyers may help a buyer enforce his or her rights if a dispute occurs.