How to back out of a purchase agreement with seller

Being laid off and want to back out of
a home for sale by owner. We signed a
purchase agreement in hopes of being
approved for a loan. How do I back out
and what will happen

Asked on September 3, 2018 under Real Estate Law, Ohio

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

The terms of the contract will govern here, so please take the time to read it.  While I am sure that the contract is contingent upon loan approval (and now without a job you will not receive that), it does not automatically cancel the agreement.  Specific performance is a remedy for the seller, but if you put down funds they could be subject to loss (again, read the contract).  Talk to the seller and tell them what happened.  Ask them to release you from the agreement.  But GET IT IN WRITING, meaning you need everyone who signed the original agreement to sign a cancellation. Good luck.


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