Can you back out of escrow while buying or selling a home in the State of California?
In this two-part series, we’re going to answer this question for you and provide you with information that both buyers and sellers must know about backing out of escrow here.
For today’s blog post, we’re going to cover the buyer side of the transaction and provide you with insight into what they need to know about backing out of escrow.
About Buying a Home in California
A home buyer in the State of California has three main contingencies when purchasing a home here, these contingencies include:
- Inspection Contingency
- Appraisal Contingency
- Loan Contingency
What do these contingencies mean?
Each contingency gives a home buyer in California multiple opportunities to back out of buying a home if the criteria in one or all of their contingencies has not been met.
Buyers must remove all contingencies in writing within 17-21 days and lift their right to cancel because, if either of these things is not done the buyer can back out of buying a home, receive their entire deposit back (minus any fees), and move forward with buying another home.
Removing All Contingencies
Let’s say that a buyer decides to remove all of their contingencies, or sign off on them within 17-21 days.
In this case, removing all contingencies means that they are showing a firm intent to close on the home but, if the buyer backs out of escrow at this point they could lose their deposit and face liquidated damages.
To avoid this problem happening to you it’s best to do your investigations first including getting an appraisal done, and your loan approved before you choose to sign off on your contingencies because you want to move forward without any questions that the home you’re intent on buying is right for you.
Need Help with Buying a Home in California? Contact Us
Are you currently buying a home in California and are wondering if you should cancel your contingencies or not?
Have you already canceled your contingencies and are wondering if you still can get your deposit back?
For help dealing with this issue contact Fred Sed Realty by calling us at (800) 921-9231 or connect with us online.
We’ve helped many clients deal with this very issue and can provide you with the guidance that you need especially if you’ve found yourself in a “sticky” Real Estate situation.