You found the right house and put an offer on it…Woo-hoo…the offer got accepted. How exciting – you are one step closer to being a homeowner and want to celebrate. But then, suddenly you start being frustrated and asking yourself many “what if” questions, wondering if this is really the right house, maybe there is something that you’ll find out and want to back out of the contract. Now what? Are you obligated to make the purchase? Are you losing the earnest money deposit?

And here comes the expert (aka Diana ) to take some of these frustrations away from you. Well-known for educating my clients every step of the way, I am happy to offer some advice to you, if you happen to read this blog post.

It is very important to do your due diligence, which is the period of time (usually 10 days in Arizona), when you do all the investigations that are important to you in regards to the property. I will get into more details on this subject on the next post. If you find anything that you don’t like about the property or the area, than you can cancel the purchase contract and get your earnest money deposit back without penalties.

If you get financing to make this purchase, you would need to have an appraisal done to find out the real value of the house. If the house does not appraise for at least the purchase price, you have a choice to cancel the contract and get your deposit back. Financing contingency will also be a reason to back out if you are not approved for the loan. You have to be very careful here, as there are some exceptions. My advice is to always consult with your lender in regards to any action that you want to take when it comes to money.

Aside from these contingencies, there are two more ways to back out. If the house is in an HOA community, you will receive some information from the association and if you find out something that does not work for you (for example some of their rules), than you have 5 days to cancel. The same applies to the title commitment. You will get this information from the title company and I advise you to read it thoroughly. If there are liens, encumbrances or other defects that may affect the property’s ownership, this is a reason to say “no”. The time you have for this review is 5 days. After this period of time, it is too late to cancel for this reason.

It is important to pay attention to timelines as time is of the essence. Every transaction is different, and there can be other reasons that you can say “no” to the house you just put an offer on. It varies case by case, so my advice is to have your real estate agent guide you each step of the way.

It is important to note that contracts are legally binding documents and parties are generally expected to fulfill their commitments as agreed upon in the contract. However, the situations I have mentioned above are legitimate reasons to stop moving forward with the purchase without facing consequences.

Reach out to me if you need an agent to guide you and be by your side all the way through the transaction.