Buyers Top Reasons to Back Out of an Offer

In real estate deals, buyers use some reasons more than others to back out of an offer. If you are a buyer and you are thinking about backing out of an offer, the reason you use must be included in your contract as a contingency. No matter how legitimate you feel your reason may be, if it is not included in the contract, you are going to lose your earnest money deposit. Not only that, you may end up in court, getting sued by an angry seller who feels the earnest money deposit was not enough to cover the money he/she lost when you backed out.

A buyer becomes contractually and legally bound to buy a property when he/she makes an offer for a home, the offer is accepted, and the earnest money deposit made. Therefore, you have to know exactly what is in the contract, and that does include reading the fine print. It means sitting down and getting intimately acquainted with every aspect of the contract so that you know what is going on, and so that you know what to expect.

If any of the reasons stated in the contract as valid and legitimate for backing out of the contract should come up, it is up to you to decide whether you want to use it, or whether you should negotiate with the owner before deciding to back out. One of the top reasons to back out of an offer is the home inspection report. Your contract should contain a home inspection report contingency in case major issues should turn up, and it would be too costly to make the necessary repairs.

The most important aspect in this case would be to ensure your familys safety, as well as the structural integrity of the home. If buying the home would compromise either of those two items, then you should back out of the offer. Another top reason to back out of an offer is the inability to secure financing, and this should be clearly stated in your contract. However, if you get mortgage loan pre-approval, this will not really be an issue because you will have the money already available. If you make an offer without mortgage pre-approval, then there should be a financing contingency in the contract.

Another top reason used to back out of an offer is if the house turns out to have liens, a second mortgage or other encumbrances. If you do not want to pay whatever may be owed, or if the owner refuses to negotiate, then those are valid reasons to back out of the offer you made for the home. However, you have to make sure that the contract includes a contingency in case the issue of outstanding debts, liens and/or encumbrances turns up.

Remember that you will have a legally binding contract, and the only way to back out of it is if the contract clearly states the reasons under which you may do so. If the contract fails to clearly define the reasons, you may end up losing your earnest money deposit or perhaps even in court if you insist on backing out of the offer.

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