Before you begin shopping for a house, it is important for you to learn how backing out of a deal works, as there might be a chance this will happen to you. When you back out of a real estate deal, you could potentially lose any money you put as the earnest money; however, there are four ways to back out without losing any of the money you put down.
1. Back out before you make an offer
The easiest way to back out of buying a home is to make this decision before you write and submit an offer to a seller for a house. If you have not written up an offer yet, you are not obligated to buy the house. If you have written an offer but have not submitted it to the seller, you are still not under contract to buy the house. Even if you submit an offer to the seller, you are not actually under contract until the seller signs and accepts the offer and gives it back to his or her real estate agent.
2. Back out due to a low appraisal
The second way to back out without losing your earnest money is by backing out after you get the appraisal back on the house. If you are buying a house, it must appraise for the amount you are offering to pay. If it does not, you likely have a contingency in the offer that allows you to void the contract, which means you will not have to buy the house, nor will you lose anything if you decide not to.
3. Back out due to the home inspection results
You will also have the chance to void the contract if you get a home inspection on the house that tells you details about problems the seller did not disclose. You do not have to void the contract if this happens, but you have the right to if you want.
4. Back out when the buyer backs out of buying your house
If you had placed an offer on a house that was contingent upon you selling the house you currently own and live in, you would not be obligated to go through with buying the house you wanted to buy if the person who was buying your house backed out of the deal.
These are four ways to back out of home-buying deal without losing any money. If you are interested in learning more about local houses for sale, talk to an agent in your city.