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Can I cancel a contract to buy a house in Utah?

On Behalf of | Nov 23, 2018 | Real Estate Law |

You found the house you want to buy in Utah, make an offer, sign the real estate contract and put down a large deposit.

A few days later, something happens. Maybe you unexpectedly got laid off. You discover the house needs a new roof. You found out the baby you’re expecting really is triplets and the new house just won’t be big enough. Or you have major cold feet.

You want out of the contract. But can you get out?

Yes, you can, if your contract has the right contingencies built in and you don’t wait too long.

The seller can, too.

Your contract to purchase the home likely includes a contingency clause that states both the buyer, as well as the lender, must sign off on the home inspection and the appraisal. If the home inspection shows major flaws, a buyer typically can back out of the purchase or negotiate for the repairs to be made. If the home doesn’t appraise for more than the purchase price, a mortgage lender can back out, unconvinced that the amount of the loan could be repaid should the home be sold.

Then there’s what is known as a “kick-out” clause. That means that a seller can include a clause that they will keep showing a property while the buyer tries to sell their existing property. If a higher offer comes in, the seller can cancel the contract and accept another offer.

But what if you, plain and simple, just change your mind? Let your agent know as soon as you know. If the home you contracted to buy is in a coveted neighborhood, there could be a line of people waiting to buy the home. If there were multiple offers, ask your agent to approach the seller’s agent to see if they can approach the next person on the list.

If that doesn’t work, you can back out but you risk losing the earnest money deposit you put down.

As soon as you decide you want to get out of the contract – and if you have no contingencies, such as the inspection, on your side – consider contacting a Utah attorney who works with real estate transactions to discuss your options.