If you’ve been trying to purchase or sell real estate, one question that may come up is if you can cancel a contract that has been made between you and another party. When you’re selling a property, you want to know that the other person is honest about making the purchase, and as a buyer, you want to know that you are getting a property worth the money you’re investing.
As a buyer, you’ll provide an earnest money deposit when you make an offer in most cases. This amount of money is then applied toward to the down payment or simply returned to you if that contract is cancelled in the future in a legitimate manner. If you, however, break the contract in a way that is not legal or within the terms of the contract, then you could lose that deposit completely. Normally, if there is anything in the contract that was not satisfied on the other party’s behalf, you can get your deposit back.
Some contingencies that may be included in a contract include receiving a satisfactory home inspection or getting your own appraisal. For instance, if you get a home inspection and the home isn’t in good repair, you can usually cancel your contact and be refunded your deposit. The same is true if you hire an agent to appraise the home and find it is worth much less than your offer; if you reduce the offer and that offer isn’t accepted, then you can typically get back your deposit.
These are just a few of the reasons you can cancel a contract; if you find you’re having to fight for your deposit back, your attorney may be able to help you make a claim and receive it following a contract dispute.
Source: Realtor.com, “Can You Cancel a Real Estate Contract?,” Michele Lerner, accessed March 08, 2016