So, You Signed a Contract Without a Contingency
Is it impossible for buyers to back out of a non-contingent contract without getting sued or losing the initial deposit??? Non-Contingent – sounds great right sellers? Not always! Buyers, you want to win so you go all in non-contingent and then you get cold feet? What do you do! Scary for sellers who thought they had a done deal and scary for buyers who changed their mind.
Can You Back Out Without a Contingency?
Many believe if an offer is written non-contingent the buyer can’t get out of it if even if the buyer changes their mind. That’s FALSE. If a seller decides to pursue the buyers deposit the whole matter may go through a lengthy legal process and there’s no guarantees a seller will get the deposit regardless of what you’ve heard. There are ways a buyer may get out of a contract that is considered “non-contingent.”
Examples and Possible Repercussions
For example, buyers can terminate the contract pursuant to Real Estate Transfer Disclosure rescission rights which means the buyer has a 3 day right of rescission after any newly provided disclosures post ratification that disclose information which affects the material desirability of the property.
Secondly if the buyers find out something that should have been disclosed by the seller that again creates a breach. In other words, should a seller “overlook or forget to disclose any of the home’s issues, or sqft discrepancies it could come back to bite sellers and potentially cost them the sale. So, disclose all and honestly.
Thirdly, if liquidated damages are signed that puts a maximum dollar amount sellers could win and the cost of pursuing may be close to that or exceed that amount where it doesn’t make sense to fight, but rather to negotiate and settle.
Closing Thoughts
In this super-heated market where buyers are given little time to evaluate properties and end up making non-contingent offers feeling they will not get the property unless they do, we will likely see some buyers getting cold feet and looking for ways to get out of contract. I am hearing about that already,
My advice to buyers and sellers in strenuous contracts that are not making it to the close, consult a real estate attorney!
If you need a Real Estate agent, I’d be more than willing to help you. If you are looking at the option of buying a home or selling a home in the San Francisco or the Peninsula in the near future please reach out to us.
