Investor · West Coast · Member since 2013 · 43 posts · 11 votes
Hi, I need a legal referral and/or advice on a deal I’m working on.
I got a property in escrow but the closing date is past due now, more than a week old. I did inspection with my own costs. Found several issues. Looks like owner is working on fixing things. No new docs or agreement have been signed since the closing date expired.
I would like to back out. Plmk what suggestion you all might have. Any legal obligation that would force me to stick to the deal.
Unless your Purchase & Sale Agreement has an unusual clause, usually the penalty for backing out of the deal is the loss of your earnest money. If you really think this deal is a dog, losing your earnest money may be the best path.
Keep in mind you will also lose credibility with your broker. They are unlikely to recommend you as a buyer in the future.
Without knowing the innate details it would be difficult to tell you exactly what options you have. I would speak to your agent (assuming you have one) on the best path forward and be completely honest about how you feel. Potentially there is an inspection contingency in the contract that allows you to back out without any penalties.
One thing I can say is if it does not feel right, it might be better forfeiting the escrow than taking on a money pit.