If you’ve ever put an offer in on a home, you may be familiar with what is known as “buyer’s remorse.” It’s that sudden sinking feeling of “oh no, what have I done,” that many buyers feel when making a large purchase such as a home and can be cause for a lot of stress. Of course, the next question that pops into your head is, “Can I terminate the contract?” While the feelings of buyer’s remorse often fade, there are occasions where you find a need to terminate the contract and walk away from the purchase. Depending on the circumstances, you may be able to walk away quite easily and in others, there may be major issues.
When Can I Terminate the Contract?
The easiest way to terminate a contract is to terminate it during the option period (if you have one). The option period is a negotiable timeline written into the contract that allows the buyer the unrestricted right to terminate the contract and receive their earnest money back. The option period is for a set amount of days from the executed date and must be paid for. The buyer will lose their option fee, which is typically a nominal amount compared to their earnest money. Within the allotted timeline, the buyer may cancel for any reason. During that option period, buyers will usually conduct their inspections of the home and use that time period to negotiate any repairs. If the two parties can’t come to an agreement on repairs, the buyer may terminate the contract.
While that may be the most common, there are other times the buyer may terminate the contract. From financing periods to performance items like delivery of surveys and HOA docs, there are several different so-called outs in the contract, but as the items in the contract are negotiable, it is hard to be specific about when you can and you can’t, since it depends on what’s in your contract.
The big answer to any questions about termination is to look at your contract. What does it say? In any paragraph where there is an ability to terminate, it will clearly outlined. As with anything, ask your agent and let them know your desire to get out of the contract and they will look for the answers for you. In extreme cases, you may need to get a lawyer involved to interpret the contract and give you the steps you’ll need to take next.
Just remember, termination is a last resort. Take a breath and figure out what it is that you’d like resolved and how you can find the answers to the issues and then maybe you’ll find that you don’t need to terminate. While we don’t like to see contracts terminate, there are times when it is necessary and the goal will be to make it as painless as possible.
image courtesy of jmlawlor