Buying a home is a big deal, so it is no surprise to think that you may have second thoughts right before closing. Though hesitation is normal, you should think twice before you decide to do anything drastic, such as back out of the agreement after the seller already accepts your offer. Though it is not impossible to back out of an already-signed real estate contract, doing so may come with costly repercussions, especially if the contract does not contain escape clauses.
According to Bankrate, you can back out of an accepted offer. However, how much damage doing so will cause you and your bank account depends on the types of contingencies you did or did not have in place.
It is not uncommon for real estate contracts to include contingencies that protect both the buyer and the seller. Contingency clauses address conditions both parties must meet before moving forward with the purchase process. For instance, common homebuyer contingencies typically involve a home inspection, home appraisal or securing financing with the lender. Contingencies allow homebuyers to back out of the real estate contract with little hassle and with the reassurance that they will receive their deposit money back.
If you plan to use a contingency to back out of the real estate agreement, make sure that you do so within the contingency period. Your contract should outline contingency deadlines. If you miss a deadline without requesting and receiving approval for an extension, your backing out may be viewed as a breach of contract.
If you back out of a real estate contract without a contingency, you risk losing your earnest money and becoming party to further legal actions. The seller has every right to sue you for “specific performance,” which occurs when the court forces you to close on the home.