If I have already put a $5,000 deposit down on a home and signed a purchase agreement but have not signed the papers from the bank, amI obligated now?

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If I have already put a $5,000 deposit down on a home and signed a purchase agreement but have not signed the papers from the bank, amI obligated now?

Asked on January 6, 2012 under Real Estate Law, West Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you signed a purchase agreement, you  are obligated as per the terms of that agreement, which, after all, is a contract. Whether or not you have applied for a loan, can get a loan, have the money, etc. doesn't matter; once you sign a purchase agreement, you are held to its terms. You can only get out of the agreement if the agreement itself allows you to--e.g. gives you some right to cancel.

If you back out of the deal, you will almost certainly lose the deposit; depending on the terms of the agreement and the circumstances, you may suffer additional liability.


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