For most residential real estate purchases - both houses and condos - there is a grace period where you may retract your offer before it is accepted. But once that offer is accepted - barring any conditions that are not met - the deal is generally done.
However, a recent article highlights a problem for buyers who are trying to get out of their purchase and sale agreements. They are discovering that if they don't have the money to complete the transaction, backing out of an agreement can have expensive consequences.
Why Are Home Buyers Backing Out Of Real Estate Agreements?
According to Canadian Lawyer magazine, buyers are making offers higher than the asking price. They are also waiving conditions - such as securing financing - to win bidding wars on properties. When the ink is dry and the dust settles, some buyers are facing problems trying to get the financing they need to complete the transaction.
The next move for buyers in this situation is to try and get out of the deal. However, breaking an agreement without penalty can be difficult if there are no conditions on the offer. Penalties include losing your deposit and even paying the seller for lost value if the property sells for less in the future.
What Can Buyers Do To Avoid These Situations?
Before you sign a purchase and sale agreement, consult a real estate lawyer. He or she will be able to answer any legal questions or concerns you have about your purchase agreement before you commit to the sale. A lawyer can also review your mortgage documents to spot any problems or liabilities.