A lot of retail stores have fabulous return policies, but a home? This isn’t a gift receipt situation. Until you actually close on the property—you have some return options. Depending on your situation, it may or may not cost you. Let’s take a closer look.
Backing out before closing
If you walk away from the sale before you close, these are the consequences.
- Losing part or all of your deposit(what you paid when you submitted your offer)
- If you offered earnest money and closing is looming—you could lose the earnest money deposit.
- Depending on your contract, you may have to pay the seller’s costs that are associated with your flip flopping on the sale.
However, you may be able to slip out the backdoor, so to speak, legally and without cost due to contingencies. There are a bunch of standard contingencies regarding mortgages, inspections, appraisals, etc. but your attorney can also be creative and add others. These contingencies will be written into the contract and allow you to get out of the sale if certain conditions aren’t met or certain circumstances arise.In an earlier post about bidding, we talked about waiving contingencies as a way to make your bid more desirable to sellers.
Here’s an example of a contingency that allows you to walk away from a sale.
You’ve signed the contract and your lawyer has included a mortgage contingency. Maybe the appraisals came in low and you have not been able to secure financing even after doing your due diligence. You would be allowed to get out of the contract, walk away, and get your deposit money back (as detailed in the contingency language within the contract).
What about after closing?
If you’ve closed and you want to break up with ‘the one,’ there’s not much (if anything) you can do. If you feel that the seller lied about the propertyor acted in a deceitful manner and basically sold you a lemon—you could possibly take them to court (talk to your lawyer first). But that’ll cost you.
A lot of buyers wonder if they made the right choices regarding area, amenities, etc. You can save yourself a lot of heartache and ‘what ifs’ by being upfront and honest about your ‘must have’ list. What is absolutely essential in your new home? If you have to compromise in a way that makes you feel uncomfortable—move along and keep looking.There will be other apartments—ones that tick all of the boxes.
This is a good time to point out just how important a great real estate attorney who specializes in NYC real estate can be.They can advise on contingencies, let you know when you can and cannot get out of the contract, and look at all of the clues to make sure your interests are protected.