Within moments, you may know that a home is the dream property where you want to raise your family. Other times, you may have to really weigh whether the property will fit your needs.
Once you decide to make an offer on a property, you have to put down earnest money and essentially commit yourself to the purchase. If the seller accepts your offer, you could soon become the property’s owner.
However, when might you need to back out of the transaction or retract your offer to buy it?
When you can’t sell your house
The market is hot right now, so most people won’t struggle to list and sell a home. However, you won’t necessarily be able to sell it quickly. You may also be unable to command the purchase price that you’ve set. You may, in turn, not be able to purchase the home that you recently offered to buy yourself.
When the appraisal comes in low
Unless you are a cash buyer, your ability to purchase the home depends on securing a mortgage for it. If the appraisal comes in lower than the amount you originally offered for it, then it’s unlikely that you’ll be able to move forward with the purchase as the mortgage your lender may extend you won’t be enough to buy it.
When the inspector notices major issues
Did you fail to notice wiring issues or foundation problems that will cost tens of thousands of dollars to fix? Replacing old wiring in a house with plaster walls can be a budget-busting nightmare, and the same is true of a sinking or uneven foundation. If the inspection turns up defects that you didn’t notice during your tour of the home, you may realize that it is better to back out and find a new home than to move forward with the transaction.
Including the right contingencies in your offer, possibly by creating custom documents for each offer you make, will maximize your protection and the ability you have to walk away from an offer – if something goes wrong before the closing. Having the right protections in place will make you feel more confident about your upcoming real estate transaction.