Milton Real Estate Agents
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First-Time Homebuyer Series FAQ’s – Can I Back Out of an Offer if I Change My Mind?

 

Welcome to our First-Time Homebuyer Blog Series. We’ve compiled answers to frequently asked homebuyer questions to help you understand the many variables associated with buying your first home. It’s our job to make this process as enjoyable and stress-free as possible for you!

 

N

o! Once a purchase offer has been formally accepted, both the buyer and seller are legally bound by its terms. If you walk away from a deal any time after signing, you’ll not only lose your deposit, but you may also be liable for any damages suffered by the seller, such as a lost opportunity to sell to someone else, expenses arising from a delayed move, or the seller’s loss of deposit on another home intended for purchase. Although unlikely, a court could also hold you responsible for the entire purchase price, plus expenses and court costs.

I

t’s important to understand that backing out of a purchase agreement can have a domino affect on many buyers and sellers, as their closings are often linked to successful sales across multiple properties.

Why conditions matter

There are three key components that must typically be met before a property can close:

  1. Satisfactory home inspection
  2. Suitable appraisal
  3. Secured financing

 

T

he home inspection and financing components must be written into the purchase offer as conditions, which then grants the buyer a specific amount of time to ensure they receive a satisfactory home inspection and/or can secure financing. After all, if you can’t get a mortgage, you can’t purchase a property. And who wants to buy a money pit?

 

A

s for the appraisal, lenders simply won’t provide financing above a home’s appraised value. So, if the appraisal is low, the deal may fall through.

T

ypically, however, buyers and sellers negotiate any issues that arise as a result of the home inspection or renegotiate the deal if the appraisal comes up short. The only true deal-breaker in this scenario is the failure to obtain adequate mortgage financing within the time allotted by the purchase agreement.

B

ecause we help people buy and sell homes every day, we understand the legalities and will advise you on whether it makes sense for you to purchase a specific property well before an agreement is signed.

 

Have questions about buying your first home? Answers are just a call or email away!  (Direct) 289.270.1719  (Email) homes@itsfamily.ca

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Roach Family Real Estate Team, 174 Mill St #103 , ON, Canada, L9T 1S2 Tel: 416-569-9851