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The new home you found was perfect, so you made an offer. But if you find out the house isn't so perfect, are you stuck with it?
Well, that all depends. Not the most exciting answer, I know, so let's take a look at some of the factors determining whether you can back out on an offer to buy a house.
Retraction and Counteroffer
If you make an offer on a home and retract it before any response from the seller, you're in the clear. Contracts can't be one-sided, so just because you make an offer doesn't mean you're bound to buy.
Additionally, a counteroffer doesn't create a contract. So if the seller comes back with a different price or different conditions, you're not bound by your offer or their counteroffer. At this point, you're still bargaining, and you can back out at any time.
Include Contingencies in Your Offer
One way to protect yourself when making an offer on a house is to build in contingencies to your offer. This means that your offer to buy the house is contingent on certain acts or information.
Some contingencies are standard, like those based on home inspections, mortgage financing, and clean title. Others are less common, like those based on the seller finding a new home, or the buyer selling her old home.
If any of the contingencies are not met, you may back out on your offer.
Yes, the final stage of grief is also the final say on the creation of a legally-binding contract. Once the seller has accepted your offer, you have a contract. This doesn't mean you're out of options, it just means that getting out of the purchase contract could be expensive.
Breach the Contract
If none of your contingencies offer an exit, you could just breach the contract. However, you could be sued for breach of contract, and many contracts have clauses written in that provide for liquidated damages (a specific dollar amount as a penalty for breach) which can be costly.
The entire home buying process can be complex, especially when making an offer, which is why you may want a lawyer to help. You can consult with an experienced real estate lawyer in your area.