Can I Back Out Of My Home Purchase?
All right. So you're under contract on a home or you're thinking about writing an offer on a home but you're just not sure if it's the perfect one for you and you might be wondering what outs do I have in the contract? How can I back out?
Well, in this video we're gonna go over all the ways that you as a buyer can back out of a contract if the home is just not the right home for you. So typically there are two outs for you as a buyer to get out of the contract and be able to get your money back with no penalties for you.
The first out, is the inspection period. So down here in South Florida, all the contracts are on the as is with right to inspect form of the contract. So what that means is you as the buyer are going to have an inspection period which is typically somewhere between seven to 10 days at the beginning of the contract, to be able to do whatever inspections you wanna do on the house. So you can have an inspector come check the roof, the AC, the plumbing, the electrical, any of the issues that you might wanna check out to make sure the home is in the condition that you think it's in. Make sure there's no hidden defects behind the walls and there's nothing that you can't see when you walk through the house originally make sure it's in perfect condition. The way the contract is worded at the buyer's sole discretion for any reason, whatsoever, you, as the buyer can back out of the contract during your inspection period you don't have to do an inspection. You don't even need a reason. You could just get cold feet. Maybe you found another house that you like better. You sign what's called the release and cancellation of contract. We send it over to the seller during that inspection period only and the seller has to sign it and release you from the contract. Once that signed by all parties you get your money back that you might've put in escrow. So there's no fee to you. There's no cancellation fee, nothing like that. The only thing that backing out of a contract during your inspection period might cost you is whatever you have paid your inspector. So if you do an inspection and this costs you a couple hundred bucks you're not gonna get that money back if you back out of the contract but you know, if it's just the wrong house for you or there's crazy roof damage that you weren't expecting anything like that, you can back out you get all of your money back with the exception of the cost of your inspection and you are fully protected.
The second out, of the contract that you have is your loan approval period. So the contracts here in Florida are different from some of the other states. We have very specific dates in which things need to get done in the contract. One of them is your loan approval period. So one of the reasons why we want you to work with a really good mortgage lender is we need to make sure that your loan is either going to be approved or denied within the period in time that the contract specifies. So typically it's somewhere between 20 and 30 days depending on what we write into the contract. If you're working with a really good lender you can shorten that period to make your offer stronger or if you leave it blank in the contract it defaults to 30 days. So to get out of the contract, you just need to get a denial letter from your mortgage your loan officer within the time period. So if it's on, if it's 30 days, on day 29 if, you know you get denied for your mortgage or whatever it is, you are protected. They give you a denial letter. We send it over to the seller and you're out of the contract. So as long as it's within your loan approval period, you're protected you'll get your money back. If you get denied after your loan approval period, you may run into some issues. So that's another reason why it's important to work with a really good lender, who's local here, who knows the local laws, knows the Florida contract and can get your mortgage on time but you are protected and you can get out during your loan approval period. Other than that, your money that you're putting into escrow is going to be at risk if you don't back out during your inspection period or if you, you know, don't get denied or approved for your mortgage in the time period in the contract.
So those are your two outs really as a buyer to get out of the contract. If you have any questions on how that works give us a call, shoot us a text, send us an email. We're never too busy to answer your questions.