Home Purchase Fails – Most home buyers sign real estate purchase contracts in good faith, but sometimes not even the best of intentions can ensure the flawless deal without fail. If the deal “falls out,” to use a bit of real estate lingo, a buyer might wonder how that will affect the ability to buy another property from a different seller.
For most buyers, the top concern is the return of the earnest-money deposit. Whether that will be refunded in full, in part or not at all depends primarily on the status of contract contingencies at the time the deal fails. A home inspection, an appraisal and the buyer’s ability to get financing are examples of common contingencies.
Buyers who exit through a contingency are entitled to their deposit, according to most brokers.
In most cases, if the buyers fully inspect the home on their own account in that time frame, and they can’t get everything worked out (with the seller) on repairs, and they want to terminate, they can do it and get a full refund.
Phyllis Yanagihara, a certified senior escrow officer with Master Escrow in Glendale, Calif., offers another example. A buyer who wanted to purchase a condominium as a rental property made closing the deal contingent on his approval of the homeowners association documents. When he discovered, within the allowable time, the association prohibited rentals, the deal was canceled and his deposit was returned.
Left in dispute, however, was several hundred dollars the escrow company had paid the association to get the documents.
The buyer balked at the expense, the seller refused to pay it, and in the end, Yanagihara says, her company had to absorb the cost as a courtesy.
Get it all in writing and read exactly what you’re signing before making a purchase offer.