can i back out of a home purchase before closing

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can i back out of a home purchase before closing

they accepted my offer and i am working with a mortgage company to get a loan.
i’ve signed and filled out lots of paper work for the mortgage company. i’m
still gathering bank statements and things they need. i’ve changed my mind about
buying the home. my fiance left me and i don’t want it now and wont be able to
afford it if i pay child support if we don’t get back together. she wasn’t on the
loan. Can i back out now before the closing and appraisal? I don’t care if i
loose the earnest money.

Asked on November 3, 2016 under Real Estate Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Legally, you can't back out, unless either 1) the contract gives you the right to back out under certain circumstances (e.g. a finance or inspection contingency) and those circumstances occur; or 2) the seller breaches (violates) the contract in some material (or important/significant) way. Otherwise, you are locked in and could be sued if you back out for the seller's provable losses (e.g. carrying costs for having taken the home off the market and carrying it for longer; costs from this transaction, etc.) OR the seller could keep the earnest money/deposit. Generally, if the earned money exceeds or equals or at least nearly equals the seller's costs or losses, he or she will just keep the earnest money. If the losses or costs significantly exceed the earnest money, the seller may keep it, apply it vs. those costs or losses, then sue you for the balance.


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