The Rights Buyers & Sellers Have After Going Under Contract
Do you know your rights as a buyer or a seller?
Want to Buy a Home? Search All Homes
Want to Sell a Home? Get a Home Value Report
Leading up to closing can be one of the most exciting yet stressful periods for both buyers and sellers. Challenging or confusing scenarios may arise, and it’s important to know your rights.
After accepting a buyer’s offer, many sellers ask, “What if a higher one comes in next week? Can I accept it?”
The answer is no; once your house is pending, you’re locked into that contract with the buyer and are therefore unable to accept another offer. If a higher offer does come, however, you can certainly make your terms more difficult for the current buyer to see whether they’ll terminate the contract.
Some sellers ask, “If the buyer’s financing falls through before closing, can I walk away?” It depends on where the buyer is in the process. There are protection periods for buyers regarding financing. If their financing falls through during this period, they have the ability to find another lender and move forward. However, if they can’t find another lender and are incapable of moving forward, they will be responsible for terminating the contract. If they terminate while in a protection period, they’ll receive their earnest deposit back, too.
A buyer also has the right to terminate a contract on the grounds of unsatisfactory HOA regulations. Typically, when a home located in an HOA goes under contract, the buyer doesn’t have immediate access to the HOA documents. Once these are sent out, the buyer then has a certain amount of days to back out if they take issue with some of the requirements of the HOA.
Another frequent buyer question is, “What if the inspection report is worrisome and I just don’t want to buy the house anymore. Can I back out of this deal?” Absolutely; we make sure that all of our clients have their inspection done during what is referred to in Texas as an option period. If anything comes up in the report that makes the buyer uncomfortable, they have the right to back out and get your earnest money back.
There’s also an addendum we attach to the contract that addresses the issue of appraisals, so if the house doesn’t appraise at the value you’re hoping for, you’re protected and able to terminate the contract with the earnest money returned.
What if a buyer’s current home doesn’t sell before they need to close on their new one? A good agent will attach an addendum to their contract that protects them if that that happens. If their house doesn’t sell by the date put into this contingency addendum, buyers can terminate the contract and get their earnest money back.
If you have additional questions about the information covered in today’s message, feel free to call or email me. I would love to speak with you.