What happens when the "house of your dreams" suddenly seems like a nightmare proposition, and you just want to back out of the deal you made to buy it?
Maybe you found out something about the neighbors after you made your offer that causes you to cringe. Maybe you suddenly got a great job offer in another state. Whatever the reason, getting out of a house deal is often a lot more possible than most people realize.
Here are the steps you can take:
1. Look at your contract
Most residential contracts give you several opportunities to back out of the house deal and still get your earnest money back. These are known as contingency clauses. Some usual reasons that you can withdraw an offer include an inability to get a loan, you discover a material problem with the house during your inspection, a serious discrepancy with the way the house or property was represented and hidden issues with the title that weren't previously disclosed.
If any of the contingencies fit your situation, you're generally relieved of your obligation to buy the house without any penalty.
2. Contact the seller
If none of the contingencies apply to your situation, the direct route is often the easiest route out of the situation. Many sellers would rather quickly get their homes back on the market -- particularly if the market is hot -- than end up in a protracted dispute with a reluctant buyer.
You're most likely to have success with this method if the seller hasn't lost out on other deals as a result of your bid. If you outbid other buyers and now regret your offer, for example, an appeal to the seller isn't likely to work.
3. Surrender your deposit
Most of the time, if all else fails, you can simply walk away. You'll lose your earnest deposit, however. The seller gets that money for the inconvenience you caused by making the offer and then backing out.
If you've only put down a fairly small amount -- $1,000 or less -- it's generally wisest to absorb the loss. If you stand to lose a significant amount of money, however, you may want to find out more about your legal options before you make a decision.