The negotiations proceeded smoothly and the home sailed through the inspection process without a glitch. Title work is now complete and the two sides are almost ready to close. But wait! Uncle Joe says that prices are about to tank nation wide. According to Joe and his coffee buddies, that home you are buying will be worthless before Thanksgiving.
What's Uncle Joe's advice? Don't sign of course! Just like buying a car, you ain't liable for nuthin until you sign at closing. But much like his Y2k predictions, Uncle Joe is wrong again. Let's see what may happen in Louisiana if a buyer backs out after the inspection period...
1) The seller may agree to cancel the transaction-- If a backup offer is available, the seller may agree to let the buyer go. Of course the agents may still be entitled to a check. Do you have 6% of the transaction price in petty cash?
2) Specific Performance-- Yeck no, you ain't getting out of our contract! The seller may sue to force closing. I've been to one of these settlements, not fun.
3) Up to 10% Damages-- In this scenario the seller collects 10% of the purchase price (and real estate commissions) as damage. Plus they get to keep your deposit!
Real estate purchases are major transactions that impact several different stakeholders. Backing out at the last minute can cause havoc on multiple levels. Buyers who need out of the contract after the inspection period should consult an attorney for legal advice BEFORE taking any action.
Information contained in this blog post should not be construed to be legal advice.
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