What happens when you back out of a Contract as a Home Buyer?

Dated: September 23 2019

Views: 288

Today we're going to be talking about what happens if as a buyer you cancel a contract.

Buyer's remorse is going to happen. Sometimes three days before the contract closes.

You might suddenly got a job somewhere else if you're not military.

Maybe you have cold feet, etc.

All kinds of things. So what are you going to lose? You’re going to lose your EMD, for sure.

Okay, for sure earnest money deposit is going to be gone.

That’s the promissory money that you threw out in the beginning of the contract. The Seller gets that.

So that’s not good. I mean, if you’ve got money to burn it may not be too big of a deal.

We've also lost anything else that you've done for the property, such as a home inspection.

You're also going to lose any money that you have paid to the lender.

Such as Appraisals, Surveys, Credit Reports, etc. We are looking at upwards of $2,000 at the lowest.

If not more depending on what your earnest money deposit was

because your earnest money deposit could be anywhere from a thousand bucks

or it could technically be $1 here in the State of Florida

all the way on up to 5% of the purchase price.

For example if you’re looking at a $500,000 home we are at 25 grand right there.

Yeah, so that's a big deal.

So don't get buyer's remorse.

And think very long

and hard about why you're doing it and if it's a good reason in your mind and you're at peace with it,

just know you're losing some money and let's talk about something else real quick.

I know we didn't discuss this before but if you get kind of forced out of the contract,

for you doing something silly. Let's say you buy a car.

If you're not over your financing contingency at that point,

you could lose all of the same things. So be smart.

Don't buy anything crazy. Don't get cold feet.

Right and you need to be very comfortable before you cancel the contract

because there are consequences.

Occasionally, the Sellers may give you some of your deposit back but very rarely is that the case.

On even more rare occasions they'll give you all of it back,

but it's super rare. So you do have some sellers that are like,

okay, I understand, yeah give them the money back.

Most of them are going to take that as damages for them being off the market during that time.

I think that's a wrap on our topic for today.

Blog author image

Andrew Iremonger

Andrew Iremonger started his Real Estate career shortly after leaving the United States Air Force in 2014. The qualities that the military instilled in him carried on in his work ethic. Just a few sho....

Latest Blog Posts

Renting vs Buying in Fort Walton Beach Florida and Surrounding Areas - Which is Cheaper?!

You are headed to the Emerald Coast and you are curious about if you should rent or buy when you move here? Well, let us talk about it. What is going on, this is Andrew with the Emerald Group right

Read More

Top Pros and Cons on Living in the Fort Walton Beach Area from a Locals Perspective - 15 Year Local

Welcome back to our Emerald Group blog. This week is going to be a bit different. Right above you will see our YouTube video of myself, Andrew Iremonger, discussing living here for the past 15!

Read More

Emerald Isle on Okaloosa Island in Fort Walton Beach Florida - Condo Spotlight

So, you are headed to the Fort Walton Beach Florida area and you are thinking about purchasing a beautiful condo! In today’s blog, we are doing a spotlight on one of our beautiful condos,

Read More

Tour Bluewater Bay in Niceville, Florida! How Nice is Niceville, Florida?

Welcome back to life on the Emerald Coast. Today's blog is going to be all about a neighborhood here in Niceville, Florida and that neighborhood is Bluewater Bay.What is up, everybody?

Read More