Rules of canceling a real estate purchase

Penalty may apply even with contingency in place

There can be serious consequences if you back out of a home purchase transaction. Your deposit could be at risk, or you could find yourself involved in a legal action if you withdraw for a reason that’s not included in the contract. Before backing out, ask yourself why you don’t want to move forward.

Do you have buyer’s remorse? This is a common malady that hits most buyers at some time during their purchase. After making the commitment, the buyers have second thoughts. This aliment rarely lasts long and usually disappears on its own. So, don’t pull the plug on the deal until you’ve sorted through your feelings. Buying a home is unlike most business transactions. It’s not just about numbers; emotions are involved.

Sometimes buyers want out of the deal because they don’t trust that their agent is working on their behalf. In this case, the first step should be to have a candid talk with the agent. If that doesn’t improve the situation, talk to your agent’s manager to see if you can work with another agent in the office who will better serve your needs.

Backing out because you don’t see eye to eye with your agent usually isn’t deemed a legitimate reason for canceling a contract. However, if your agent acts contrary to your best interest, such as removing a contingency from a contract when you specifically told your agent not to remove the contingency unless other conditions were met by the seller, you should seek the advice of a knowledgeable real estate attorney.