Many buyers look at multiple properties before ultimately settling in on one that they like. They might put in multiple offers in fierce competition for the property before the seller ultimately goes with them. This is often why buyers become so invested in the purchase of their homes. Securing one that meets their needs isn’t always easy.
As competitive as the real estate market is, you may wonder if there’s any chance that you could have a seller accept your offer, only to pull out of the deal. There are a few different instances in which this could occur.
What do your purchase contract’s contingencies say?
All contracts have contingencies. They can be found in the terms and conditions section. While there are some standard covenants listed in such an agreement, others may be specific to what you and your seller have negotiated.
Some of the reasons these contingencies may allow your seller to pull out of the deal include:
- When a seller is unable to purchase another home. Many sellers’ banks will only extend them a loan for another home if they first offload the one that they have. If they’re unable to find a place or their offer on one falls through, then they may have to pull out of the offer with you to avoid becoming homeless.
- If the buyer’s appraisal comes lower than the agreed-to purchase price. A seller may have a certain amount that they need to receive to pay off an existing note on the property. The house may also have custom features not accounted for in the appraisal. Banks are only willing to extend mortgages for how much they believe a home is worth so without a meeting of the minds on the appraisal, the buyer and seller may have to terminate their agreement.
One of the reasons you’ll constantly hear from others about the importance of reading contracts is because it is critical to understand what contingencies are in place. You’ll need to read your contract to ensure that you won’t be placed at a disadvantage.