A real estate transaction involves many moving parts, legal commitments, and considerable time and money. Many going through this complex process get to a certain point where they feel stuck. Even if the sale is not going as they anticipated or the property is not what they expected, they feel they have committed to the process and must proceed. After all, they signed a sales contract.
If you are in a similar situation, you may be wondering if there is a legal way to get out of a real estate contract, cut your losses and move in a different direction. Whether you are buying or selling, getting out of a contract is seldom easy, and it may leave you open to penalties or even threats of a lawsuit. On the other hand, your contract may hold certain details that leave you with a safe escape from a real estate deal that is not going your way.
Can I get out of this?
Under specific and limited circumstances, you might be able to cancel your sales agreement and walk away from the transaction without fearing legal ramifications. A lot depends on how carefully you drafted the contract and how much detail you were able to include. Most real estate contracts include standard contingencies. These are requirements that one or both parties must meet before the sale can proceed. Failing to meet these contingencies can void the contract. Some common contingencies include the following:
- A property inspection reveals serious structural or systematic defects.
- As the seller, you are unable to find a new home; as the buyer, you are unable to sell your old house.
- Issues arise with the title that prevent it from being transferrable, such as liens on the property.
- If you are the buyer, you might be unable to obtain financing that meets the terms you are seeking.
- The party selling the property fails to disclose defects Texas law requires or is untruthful if you ask specific questions about the home’s history.
- Unexpected situations arise that neither you nor the other party could have expected, such as the city planning to construct a highway close to the property.
Whether you are reviewing a sales contract before signing it or you want to get out of the transaction, you are probably facing many complex questions that could have long-lasting effects. You would be wise to take your time with your decision and seek competent and reliable advice.