How Can I Cancel My Real Estate Contract In Florida?
Sat Oct 1, 2022 on Florida Real Estate
You don’t have to read beyond the headlines to know that prices are up, and interest rates have virtually doubled in the past twenty four months. In addition, many people have chosen not to look at their 401(k) plans or other investments because both have been down due to the current economic climate.
The question is: How are these factors influencing the current real estate market?, Lately, there have been a substantial amount of cases in which people who had previously signed a contract to purchase a home in Florida have, for one reason or another, decided not to proceed. In fact, a recent Redfin article indicated a new study reflecting that literally hundreds of thousands of people nationally (and proportionately in Florida) over the course of the past year have backed out of their contracts. That is a 3 percent increase from the prior year.
So, the question is, how does one legally pull the plug and get out of a contract without creating a firestorm? The answer, of course, depends on what the terms of the contract are and the reason for which you have decided not to proceed. Even if it is purely buyer’s remorse because real estate prices have hit the skids, one has to be very strategic and careful on how one positions the decision not to proceed. If you are not careful, you could end up in a legal battle, where not only your escrow deposit will be at stake, but you could be on the hook for purchasing the home (which legally is referred to as “ Specific Performance”) and, even worse yet, paying not just for your legal fees, but for the seller’s legal fees too.
Of course, there are many reasons why you may decide not to proceed with your real estate purchase. Many times, when one buys a home, it is contingent on a number of factors. If those contingencies do not materialize, the contract is either automatically void or can be voided by the buyer and, in some cases, even the seller. A typical contingency is obtaining financing. Financing has now become a major issue since interest rates have doubled, and one’s ability to finance a home has now been reduced by the fact that so much more of the mortgage payment will go towards interest, thus reducing the amount of home that an individual will qualify to purchase. Another contingency is home inspections which seem to be problematic especially considering the age of the home or a seller not necessarily being able to pay for the necessary repairs needed. For instance, whether the house in question requires a new roof, has mold, or has poor electrical, are all legitimate reasons not to proceed to purchase a home, provided one does the inspections during the applicable time period in the specific contract.
In addition, sometimes, there are title issues that arise that allow one to not proceed with the contract. Of course, a good lawyer will sometimes find other reasons why not to proceed, reasons that could include the fact that the contract is not valid because not all the proper parties have executed the contract or numerous other technical reasons that would allow one to not proceed. For example, there could be liens on the property, or the property may have an estate issue, both l of which would not allow the contract to close on time, thus permitting the buyer to decide not to proceed with the purchase.
Unfortunately, many times people get into a pickle because they do not understand all the terms of the real estate contract and do not properly negotiate the contract. Before you sign a real estate contract, which is probably the largest obligation in your life, it would make sense to retain the services of an attorney who is well versed in these issues. Oppenheim Law has been here for you for the past 33 years, and our team has been involved in over $3 billion worth of real estate contracts.
So, if you are contemplating purchasing a home or, in the alternative, are attempting to try and get out of a contract that you recently signed, please do not hesitate to contact our firm. We will be glad to evaluate your circumstances and let you know your options.
From the trenches,
originally posted at: https://www.oppenheimlaw.com/how-can-i-cancel-my-real-estate-contract-in-florida/