YOUR REAL ESTATE QUESTIONS ANSWERED: WHAT HAPPENS IF I DECIDE TO BACK OUT OF BUYING THE HOUSE?

     When a buyer backs out of a real estate contract, the outcome depends on the terms of the agreement and the reason for cancellation. Contracts typically include contingencies that allow buyers to exit the contract and get their initial deposit returned.  Common contingencies include: financing, selling another home, community document review, home inspections and appraisal results. To protect their deposit, buyers must adhere to deadlines and conditions outlined in the contract.

     If a buyer cancels the contract for reasons outside these contingencies—such as cold feet, deciding to buy a different property, or missing key deadlines—they risk losing their earnest money deposit. This deposit is intended to demonstrate the buyer's commitment to the transaction and compensates the seller for time off the market if the buyer defaults.

     A buyer recently backed out of my listing's contract because their PA home hadn’t sold, but selling it wasn’t a contingency within the contract terms. They forfeited their deposit to the seller. In Delaware, contract cancellations and deposit returns require a mutual release agreement, while states like Maryland allow unilateral releases.

For more information, contact Christine McCoy today!

For more information visit The Real McCoy Group or contact us at 302.539.1777.