When you decide to list your property with a Realtor, hire a Realtor as a Buyer’s Agent, or sign an offer on a property…you are signing a contract. It is important that you read the document prior to signing…especially the purchase contract that will be presented to a seller.
So, many of you are probably thinking…that makes sense or that is a no brainer. But let’s expand on that. In regards to the purchase contract…aka the written offer, you are presenting the terms in which you are willing to buy a seller’s home. That offer or contract becomes binding when the seller agrees to the terms, signs it and delivers it to you, your real estate agent, your attorney, or any one else you have designated as your representative. Once it is delivered to one of those parties…the contract is binding in a court of law. Unless you have a valid contingency to allow you to withdraw from the contract, you could be liable for the terms of the contract.
So what does that mean??? That means that if you cannot perform your duties as a buyer or you choose not to perform your duties as a buyer…you can (simply put) be sued. So for example, if you tell the seller it is a cash offer/purchase…but it is really and equity loan or some other sort of loan…and you can’t get the loan after all…you can’t back out of the contract due to lack of funding. You could be found to be in breach of the contract. You also cannot change your mind and decide not to buy the home. In either of these cases, you must have a valid contingency you are using to properly be “released” from the contract. There are usually lots of valid contingencies…so make sure you talk to your Realtor and/or attorney about your specific situation.
And finally, if you are not going to go through with buying the home and you DO have a valid contingency to get you out of the deal. There is still a process involved to terminate, release, and return your escrow funds. It is not usually and automatic thing. Again, ask your Realtor or attorney about the process in your area if you need to back out of a purchase.
As for contracts between buyers/sellers and Realtors. They are just as binding. When you sign a listing agreement or buyer’s agreement…you are committing to that Realtor for the period of time on the agreement. And in turn the Realtor is committing to you. If you have a valid agreement with an agent…either as a seller’s agent/firm or a buyer’s agent/firm and you breach the terms of that agreement…you could be liable for the commission that firm would have received by assisting you.
The moral of the story is to take contracts seriously and discuss the contract with your agent/attorney. All contracts are different and have different terms. Ask your attorney or Realtor if you have any questions about your contract. This blog is simply an opinion and does not replace the conversation you should have with an attorney or Realtor that you are working with.
If you are looking to sell property on the Eastern Shore of Virginia or Maryland…give me a call 757-894-1479 or email me at firstname.lastname@example.org .