There are some differences in how to go about this process depending on if you are a buyer or a seller. To help you understand the key differences I have constructed a few tips to help you get out of a bad real estate contract:
1) If you are a buyer you typically have more leeway when it comes to opting out of a contract, especially before signing. The first thing you should do is to contact your agent and notify them that you want out. The reason for this is that either as an investor, or a homeowner, the rules for cancellation and penalty are usually specific to an individual contract. As investors, we should strive to use our own contracts so that we know them very well and what to look for in any situation. However, notifying your agent can be beneficial as they may catch something that you missed or know about something you don’t. Always utilize the efforts of those on your team, after all, that is what they are there for.
2) The next thing you should do is immediately review your copy of the contract to look for reasons that a buyer could cancel the contract, contingencies that need to be fulfilled before the sale is final, and how much time you still have left to cancel the contract, otherwise known as the right of rescission. Unfortunately, often times if you are using someone else’s contracts and you have put down a deposit, you will need to be prepared to lose that deposit upon cancellation of the contract.
3) Another great thing to consider when cancelling a real estate contract is to consult your investor friendly real estate attorney. If you have found a way out of the contract that is acceptable, go ahead and call your attorney to have them void the deal under the terms that you found. It also may be a good idea to sit down with them while reviewing the contract, and have them help you find contingencies if that is something that is in your price range. Typically attorney fees start at around 250 to 300 dollars per hour. Once you contact them, they need to act quickly in order save your opportunity to claim those contingencies we talked about.