Profile picture for user08975102

backing out of a contract

my brother signed a contract for a home but is having concerns about appraisal on the house as he is assuming it will be less than expected. The seller had a no-contingency clause, but my brother didnt put any deposit money yet. So can he backout of the deal or are there any repurcussions. Thanks
  • November 29 2012 - US
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Answers (4)

Profile picture for Ofe Polack
I know oftentimes we sound like a broken record, but I have to say it again, please, seek the guidance of a buyer agent to avoid issues such as this one.  An offer needs to be accompanied by a deposit to be considered fully executed, so if your brother did not give the deposit the purchase and sale may not be complete.  I cannot understand why your brother would have removed the financial contingency, unless he inteded to pay cash for it.  If that was the case and he still wants to purchase the property, he should have had a contingency based on the results of the appraisal, such as "property must appraise on/above this offer...." Mike offered a word of warning, I would also yield to what he says.
  • November 30 2012
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Profile picture for user08975102
Michael, thanks for the advice...yes the seller signed but it was on one of the offer my brother had put...my brother didnt give any deposit yet...
  • November 30 2012
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What you appear to be saying is there is no finance contingency clause (or any other clause) which would allow your brother to exit the contract.

Has the seller signed the purchase agreement? It's possible that the seller could sue for non performance of contract. So the best advice you can give your brother is to see an attorney. And next time, make sure there's a finance contingency clause.
  • November 29 2012
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If your brother intended on obtaining a mortgage to purchase there is a mortgage contingency clause in the agreement of sale.  If the home does not appraise the mortgage company will approve the loan. That would end the deal.

  • November 29 2012
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