You don’t take possession of a California home immediately after your offer to purchase it is accepted. Instead, you typically have a chance to inspect it, obtain financing and complete other steps in the closing process. During this time, you may be allowed to back out of the transaction, and depending on the reason why you’re backing out, you may be allowed to do so without penalty.
Offers generally come with contingencies
Typically, a purchase offer will be contingent on the condition of the home and your ability to obtain financing. If there is an issue with the property, your inspection contingency may allow you to either ask the seller to take care of the issue or to nullify the contract. If you are unable to obtain financing, that may also allow you to get out of your purchase agreement without sacrificing your earnest money.
You may be forced to close
It may not be possible to back out of a deal for any reason not specified in the purchase agreement. For example, you may decide to do so because you found another house that you liked better or because you found a job in another state. However, you may risk losing your earnest money, and it’s possible that the seller will commence litigation in an effort to compel you to close the deal.
In many cases, backing out of a real estate transaction will result in little more than losing your initial deposit. However, you are strongly encouraged to review your purchase agreement prior to doing so. This may give you more insight into what your rights and obligations are and what the actual consequences might be if you don’t follow through on your offer to buy a home.