You may believe that you have found the home of your dreams. However, the property might show some problems after you have made your offer to the seller. Given that your earnest money deposit could be a hefty sum, you probably fear losing your deposit by withdrawing from the purchase.
As The Motley Fool explains, whether or not the home seller will keep your earnest money deposit depends on the circumstances of your withdrawal from the purchase.
If your contract does not allow it
A real estate purchase contract should contain a number of contingencies. These allow you to withdraw from the purchase and get your earnest money back if certain conditions do not occur. For example, an inspection contingency allows you to walk away if an inspection reveals substantial problems with the house.
There are many kinds of contingencies an agreement can include. You should examine your agreement so you know which contingencies cover you, as you can lose your deposit if you back out for any reason.
If you withdraw after the contingency period
Even if your reason to not buy the home complies with a contracted contingency, pay attention to the period of time the contingency lasts. You could still lose your deposit if you pull out of the agreement after the contingency expires. This might happen if you fail to notify the seller of your intent before a specific deadline.
Carefully reading over your agreement at the outset could help you understand when you can get out of a home sale without a loss of money. Remember that you may also negotiate with your seller to include contingencies that you want to have.
