How to cancel a Real Estate Contract

A well written contract should be the number one priority for a buyer's agent. If they don't have their clients back who does?

as for #20, the question about the death certificates, the deceased had to have been buried or cremated, has anyone contacted the funeral home? or looked for an old newspaper notice? Unfortunately, we attorneys do need to know that "dead" guys are really dead!  If it was back in the chain, did the current owner have title insurance? then that company should indemnify. If it is the current seller, that person has some connection with the deceased, as PR or heir, that should allow them to get death certificates from the state.

It's really not that easy for a seller to keep an earnest money deposit in California. Some sellers may be delusional in thinking it's a way to make some extra cash if a buyer decides not to buy. It's like a judge told me once, no one can make a buyer buy a home or an owner sell one. If a buyer decides not to sign the escrow release, then what? Seller can't sell and will have to pursue the deposit in arbitration. Good luck with that.

I recently had to get a buyer out of a contract. It was not pretty. They could not close because the home they were selling fell out of contract. This was after spending the money for inspections, appraisal and the mortgage application.

Somehow they convinced themselves I should repay them out of my pocket. They can take it out of the commission I lost when they lost the deal.

Had a buyer back out of closing on a home 4 days before closing and he WAS a real estate attorney with the US Coast Guard! Imagine that!

All contingencies met, no issues from inspection, loan approved, appt set to close. Turns out he put in for a transfer (told no one), transfer was granted and that was his excuse for walking away. Sellers rec'd earnest money deposit, but it cost them additional hardship. By contract they had 4 days to deliver possession and were moving out of state, so the wheels were already in motion to make the interstate move. Stuck with 2 homes, 2 property taxes, 2 homeowners insurance policies, 2 sets of utilities, and had to hire someone for lawn maintenance. They could have sued for damages, but luckily I found a cash buyer within a week that bought it for more than asking price. Sellers settled for just the earnest money.

How many sellers would accept an offer with every listed contingency? Today's market commands that buyers are already approved for a loan so why would a contingency be required in the contract? Buying "as is" is another issue, so inspection, repairs and appraisal issues shouldn't be a contingency either, so it really depends on the terms and conditions of the sale, doesn't it?

I like this, I think it's reassuring to buyers to know that if they really want out, there are ways to make that happen.

Whenever possible, I try to submit contracts with no contingencies at all - other than a clear title.  So many of these weasel clauses end up causing your contract to get rejected.  A buyer can actually get sued for specific performance or damages above and beyond a deposit.  But that seldom happens on small residential deals because the cost involved is not worth it.  

Exactly use the contingency.  I have never lost a deposit for a client.  In California the limit of damages is generally speaking the deposit and even then the seller has to document they lost money by a buyer backing out.  

Good reminder post. Contingencies, Contingencies, Contingencies.

I would recommend to my client to not accept a contract from a Buyer who has a clause in it that the contract needs Attorney approval....that should already have been done if needed. If it was in there...it would need to have 48 hours or less for that contingency to fall off.  

# 33'scomments are ridiculous!  He's saying buyers should just take the house - defects and all the rest of the things sellers know about and are trying to hide!  And, for the generosity of the sellers even taking the time to put their precious signatures on the contract, they'll up the price by $25,000.  

Contracts are complex documents that protect both buyer and seller.  Working with a knowledgeable agent and title company is essential.

There are some contingencies already built into our Arizona purchase contract. A good buyers agent should be able to explain what the buyer is getting into prior to writing the contract. Like Sharon (#42) said, there are things within a contract to protect both the buyer and seller.

This is great news for the buyers, but not really for the sellers.  I have been asked many sellers, "why is it like that?"  The answer is a rather simple one, the seller knows everything about the home and really has no surprises, but the buyer initially knows nothing about the home, which may have a lot of surprises.  Bottom line is if the seller discloses everything, there should be no problems with closing.

I understand what Kimo is saying, but if the home is being sold "as-is," that is all the more reason to have the contingencies in there.  All "as-is" means is most likely the seller will make no repairs.  The potential buyer will want to know what is all wrong with it and know how much money they will have to spend to get it repaired to see if it is worth it.

I want to send this BLOG on and on and on! Great information on a a common issue.

Have a fantastic week Mike & Eve.

There are always ways out for the California buyers, from contingencies to some legal tricks of the trade to make certain they receive their EMD.