Can a buyer back out of a home purchase on the day of closing?

Question

Some last minute problems that the seller is not willing to do anything about have arisen. These 'problems' are going to cost the buyer a lot of money. Do they still have the option of backing out if even if they were supposed to close on the house tomorrow?

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Thanks!!!

Answer 1

Yeah!  You can back out at ANY time.  Most sales contracts state if you can't qualify for a mortgage or have some other really good excuse then you can back out.  If you just want to back out you usually lose your down payment.

Answer 2

Yes, they can back out one second before closing - or even at closing if they haven't affixed their signatures yet.  And if they have a good enough reason to break the purchase agreement, they can even demand for their binder back.  If they just "changed their minds" they can do that as well.  But you get to keep the binder.

Answer 3

Let me guess, you didn't have a Realtor?

We can always spot those.

The short answer:  No, you can't back out now.

The reason:  You should have put an inspection contingency in the contract, and without one, you are still legally bound to buy the property, and it doesn't matter if the repairs would cost you $100K.

Inspection contingencies also have dates that they must be completed by and a deadline of when the repair request must be presented to the sellers...the sellers can fix all, some or none...but unless you have a $$$$ limit in your contract, you are stuck.

You can't just hand it over the day before closing and then start screaming, "We need you to fix these things!!!!"

If you didn't require it in your contract or an addendum later, they can sue you for non-performance.

Now you have your answer.

Answer 4

Unless you have a continency in your offer that says under what conditions you could get your earnest money back (specifics about financing, interest rate limit, results of inspection, etc.), you would likely lose your deposit.  You could even possibly be sued for specific performance requiring you to do what you agreed to in the contract (offer).

Answer 5

Why were the utilities just turned on?  The buyer should have insisted that they be on during the home inspection.

Buyers can back out at almost any point in the transaction,  regardless of what contingencies have been removed.  Depending on the circumstances they may be entitled to get their deposit back.  Then again, they may not.

They may also open themselves up to a lawsuit.  

Do the buyers no longer want the home or are they willing to negotiate new terms based on the findings?  

How does the seller feel about the new discovery?