One of my buyer who wrote a contract couple months back on a beautiful home in Ashburn Virginia found out that he cannot purchase....so how do you void a builder written contract for a home that won't be ready to deliver until mid summer or it may be ready for closing?
As we all know builders hire their finest attorneys to write their contract. So getting out for a buyer is also a big challenge!!!
If you do get into this situation where you have to void the contract your first step would be to contact your Realtor. Be honest about your reason why you want to void the contract. Provide any supporting documents that you can to prove your honestly and reasoning. Let the Realtor approach the sales manager at the builder's office.
Depending on the reason the builder can take one of the following step:
1. Mutually agree to void the contract and refund your deposit.
2. Forfeit your earnest money deposit.
3. Forfeit your earnest money deposit plus come after for additional damages or loss they may have to incur for the sale of that home site/home.
4. Forfeit agreed amount of deposit.
In my case, the spouse was diagnosed with cancer. They are currently renting and would love to own their dream home. However considering the expense and uncertainty they wanted to void the contract. I approached the builder who was very sympathetic to their situation and agreed to void the contract without any penalties.
Few years back I had another situation where the couple decided to separate and neither one could qualify for the mortgage on their own. Again we got the builder to void the contract and deposit was refunded. It was a messing situation with FHA loan qualification. I consider them very lucky to get out of this with out any penalties. The builder was able to sell that home for higher price within few days.
The ultimate decision may depend on the builder and what options and stage of construction the home is at.
Consulting an real estate attorney is recommended.
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