You just found your dream home in Jacksonville, negotiated the price, had your offer accepted, and stamped the purchase contract. But now, you are contemplating withdrawing from the purchase agreement. The list of reasons for a buyer to terminate a home buying consent is endless. Perhaps, you’ve discovered issues after inspection, developed financial constraints, or you have an urgent matter at hand that requires your undivided attention.
Whatever the reasons are for the buyer's agreement cancellation, there could be significant financial repercussions affecting you or the seller. Below are reasons why a buyer can withdraw from a home purchase agreement:
If a buyer has not succeeded in selling their old home, it can affect their capacity to buy a new one. For instance, a buyer might have a mortgage attached to the current home, so qualifying for a new one might prove difficult. Also, even if the financier approves a second mortgage, most buyers might shy away from servicing two concurrent loans, especially in such an unkind market.
The contingency clause covers the ability to sell the former house, allowing the buyer to cancel the purchase before the expiry date. However, the clause also permits the seller to keep the home on the market, and in case of a better offer, they can cancel the agreement.
Losing a job amid the home purchasing process will undoubtedly affect the buyer's ability to pay off the mortgage. It's unfortunate that when such an event occurs, financial constraints kick in, and many buyers choose to terminate the agreement. Operating without a paycheck also hurts their financial qualifications, complicating the next reason on our list.
The inability to qualify for a mortgage from financial institutions is a fear for many buyers. There are several reasons why lending firms may choose not to offer you a mortgage. Reasons for a mortgage denial include poor credit history, a change in your job situation, or a failed home inspection. However, if the buyer incorporates a financing contingency clause into the contract, they can back out of the agreement and incur zero losses before the clause expires.
At Atlantic Coast Title and Escrow, our experienced Jacksonville escrow attorneys are ready to guide you through the process of buying your new home. Please contact us online or call us at (904) 853-5591 to learn more about our services.