If the buyer submits a real estate contract and it is accepted and signed by the seller, then there is a legally binding contract. There are certain circumstances where a real estate contract can be terminated. They are listed below.
The buyer can withdraw an offer at any time up until the offer has been accepted by the seller and communicated. An offer is terminated if the seller rejects the buyers offer. A counteroffer is considered a rejection of an offer. If either party dies or is deemed to be insane, the offer is terminated. If the property is destroyed by fire or another natural disaster, the offer is terminated.
A contract can be terminated as a result of several other factors. Breach of contract is where one of the parties fails to meet the obligations agreed upon in the contract. One party can also revoke and terminate a contract. Renunciation is where both parties agree to terminate the contract. Lapse of time is when the contract specifies a time period for performance by the parties. Abandonment is where one party walks away from the contract and does nothing. The other party can then terminate the contract.
If a contract is based on the buyer receiving a loan commitment within a certain period of time and a mortgage cannot be obtained within that time, the contract may be terminated. If during a search of the title a defect is found and they cannot be cured, the buyer has the right to terminate. The buyer has the right to have the property inspected. If repairs exceed a pre-agreed dollar amount or the seller declines to make the repairs, the buyer may terminate the contract. There may also be a contingency in the contract for the sale of another property, such as the buyer’s current home. If this property doesn’t close by a certain date, the buyer may have to terminate the contract.
Most buyer’s don’t sign a contract intending to terminate it, but sometimes it does happen. Keep in mind that it can be terminated by the buyer or the seller under different circumstances as listed above.
This article is not intended as legal advice. Always seek advice of a lawyer if you wish to terminate a contract and are unsure of your legal obligations.
Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL firstname.lastname@example.org