Sometimes, your plans don’t always pan out as you’d hoped. This may hold true for selling real estate in New York. Fortunately, it’s possible to exit a transaction without facing penalties.
Sudden, unexpected issues
Unforeseen situations can arise that may prevent you from completing a real estate transaction. You could back out of it and not face penalties if you suddenly lose your job or fall ill. Even if you had the best intentions of going through with the sale, these types of emergencies can put a wrench in your plans.
The contract is still unsigned
A seller could back out of a real estate transaction if the contract has gone too long without being signed by the buyer. This may signify that the buyer is unsure and shows a lack of commitment. The seller may become impatient and nervous and move on to find another buyer who may be more serious about going through with the purchase.
If the appraisal shows that the property is considerably lower in value than the seller originally believed, it’s possible to back out of the contract. The seller may not want to lower the price of the property and, instead, prefer to cancel the transaction altogether.
The buyer won’t adhere to the contract terms
Sellers are legally entitled to put a halt to a transaction involving real estate when the buyer refuses to adhere to the terms of the contract. For example, the buyer may try to stall for time to secure a loan or unreasonably demand that the seller make certain repairs or upgrades to the property.
Escape clause in the contract
An escape clause in the contract protects the seller in the event he or she backs out of a transaction. Usually, someone uses this if he or she hasn’t yet secured new housing by a certain point.
If you use any of these reasons to back out of a real estate transaction, you can avoid penalties. Such clauses are difficult to negotiate and unusual in residential contracts.