Cancelling a Real Estate Purchase
Property owners who “overlook” issues that can affect the sale of their home can have big problems down the road.
A leaky roof. That dryrot just below ground level on one of the posts that holds up your back patio. That un-permitted room addition off of the
These are but a few examples of issues that may affect the sale of your home. Whether they were caused during the time you have owned the home or not, if you are aware of their existence, you must disclose them during the escrow process.
Why disclosure is so important.
It is a requirement that sellers disclose all KNOWN issues that may affect the sale of their property. These issues may affect not only the value of the property, but also its safety and security. That being said, the buyer has the opportunity to hire a professional home inspector during the escrow process to assess any other issues, known or unknown. They also have the right to request any repairs that may arise as a result of the inspection. The seller may accept the request, refuse the request, or come to an agreement with the buyer as to which repairs may be initiated before close of escrow. The buyer also has the right to cancel the transaction prior to the contingency expiration period should an agreement not be reached. Continue reading
What happens if a transaction is cancelled during escrow?
As we often say, buying a home is most likely one of the biggest decisions you’ll make in your life. As professionals, we do our utmost to insure the home you’re buying is definitely the one you want. Yes, there are some buyers who get “cold feet” or buyer’s remorse, in fact, it’s almost normal for you to feel a bit overwhelmed and anxious as again, this is one of the biggest decisions you make.
That being said, are cold feet or buyer’s remorse good enough reasons to cancel your purchase contract with the seller? What if the seller wants to cancel the deal? Can he/she do so?
Buyer’s right to cancel.
When a buyer makes an offer on a home, the agent (In California) will use what’s known as an RPA-CA, also known as a California Residential Purchase Contract and Joint Escrow Instructions. This eight page contract (Plus 2 page Buyer’s Advisory addendum) provides detailed information regarding your purchase. Also included in the RPA-CA is a list of instructions known as “contingencies” that require you to complete certain tasks and provide information regarding the purchase within a certain amount of time. The default time frame for most contingencies is 17 days, although they can be amended upon agreement by both buyer and seller.
During this contingency period, the buyer may cancel the agreement and obtain a refund of his/her deposit as long as they do it “in good faith and in writing.” While the buyer does not have to explain their reasons for cancelling the agreement to the seller, “good faith” may imply that the buyer has a compelling reason to cancel, which he/she may need to provide should the seller attempt to pursue action as a result of said cancellation. Continue reading