How to get out of a purchase contract?

Question

Hi guys,

I was thinking of buying this house, and I am in escrow and the contract is: "Contingent on buyer's due diligence."

However, I have realized this property is not a good investment for me for many reasons: one of the reasons, the seller would not allow to do due diligence until the tenant moves out. After the tenant moved out, I only had two days to do my due diligence but the seller never confirmed the time for my people to go into the property to do the due diligence. So inspection period is over. I stopped the earnest money check from being cashed because of the issue with the due diligence...I honestly, want out of the contract.

How to word my reasoning for getting out so I would not get into a legal trouble for getting out?

Thank you

David Lee Hall, III · Answer

@Mary Jay

Does your contract stipulate the seller has to allow buyer due diligence? If the seller did not allow inspections, etc. in the period allowed and used tenants as an excuse they could be in violation (unless the contract specifically had tenant related terms).

I would advise providing the contract to a local attorney for review with communication records that are relevant.

That said, what are the penalties for you failing? Is if just losing your hand money? Is that loss appropriate for you learning to have a tighter contract via the school of hard knocks?

The person holding the hand money may be able to advise on this as well.

Mary Jay · Answer

Thank you .

The seller would not allow for my People to go in and do roof/foundation/etc inspection.

So it’s not my fault...

What is your recommendation?

How to get out of the contract without them penalizing me?

Because when you say that I am in default it sounds like I’m gonna be penalized. Why should I be penalized if the seller did not allow for my due diligence to happen on time...

I want to get out of the contract without being penalized. How would you proceed?

Russell Brazil · Answer

You are past the due diligence period? If you are, you will be in default of contract. Stopping payment on your earnest money deposit likely also puts you in default.