In real estate, the importance of being earnest is measured not by a handshake and a “Sure, we’ll buy your house,” but cold hard cash—aka earnest money. That’s the deposit that you put down once you agree to purchase a place (typically 1% of the home’s price) and that you stand to lose if you back out of the deal for no good reason.
While this safeguard serves to keep fickle buyers from changing their minds unnecessarily, there are plenty of times when you can—and should—bail with your earnest money firmly in hand.
Here are five good reasons to walk away that won’t force you to forfeit this chunk of money. Of course, you MUST have these contingencies specified in your contract.
- Appraisal Contingency: The house appraises for less than expected
- Financing Contingency: You are denied financing by your lender
- Home Sale Contingency: Your other house doesn’t sell
- Inspection Contingency: You find out the home has a major flaw
- The seller backs out
For more details about these situations, follow this link to the full article by Craig Donofrio | Mar 21, 2016