I've changed my mind on buying a house, can I get my earnest money back?

Question

We signed a whole bunch of papers with intent to buy the house, but we really want to make a more informed decision before purchasing our first home. What do we need to do in regard to the papers we signed, and can we get our earnest money back? We did this just 3 days ago. Thanks.

Answer 1

You may be able to cancel the contract and get your money back, but only if you act immediately!

Almost all contracts include "contingencies" -- which are conditions that give you the right to cancel if the conditions are not satisfied. For example, your contract probably has contingency provisions for "financing", "termites and pests", "physical inspection", etc. Each of these contingencies will have a separate time period in which you must either "remove the contingency" (i.e. approve the condition) or cancel the contract (in which case, you will get back your money).

BUT!!! you do have a contract, and so you cannot cancel the contract just because "you changed your mind". That is NOT a contingency. If you tell the seller that you are going to cancel because "you changed your mind", then the seller has the right to keep your money, EVEN IF YOU COULD HAVE CANCELLED THE CONTRACT BECAUSE OF A VALID CONTINGENCY. (sorry for shouting)

As far as the "3 day cancellation rule": this depends on your "jurisdiction" (country and state). In order to know whether you have the right to rescind (i.e. cancel), we must know this information, so please re-post.

Bottom line: act quickly to have someone (hopefully a trusted lawyer-friend or real estate agent who is not connected to this deal) read over the papers with you, explain your rights and try to find a valid reason to cancel the contract.

Finally -- ask yourself why you want to cancel. Maybe you're just a little scared about the big step, and maybe you _should_ go through with the purchase. Many buyers have "buyers remorse" without any real reason. If there is something actually wrong with the house, then yes, find a reason to cancel. But make sure that you want to cancel for a reason that makes sense to you.

Good luck.

Answer 2

First look at your contract. Find out exactly what are the contingencies. You can get out of the contract (but lose your money) for any reason including you just don't want the house any more. But it's more difficult to break the contract and get your earnest money back. There are few ways to do that based on routine contract contingencies:

1. IF a home inspection is required by the contract and one is done and something is found needing repaired and you request the owners repair it and they refuse, you can then back out of the contract and get your money back. There is almost always something that needs to be repaired or replaced. Of course you have to pay for the home inspection but it's a lot less than your earnest money that's for sure.

2. IF your loan cannot or will not go thru, you can get out of the contract and get your money back. So, for instance, if you have overestimated what you can afford, then your loan agent can write a letter stating you cannot be approved for the loan due to your income, etc., and you can break the contract (earnest money returned).

3. IF there is a contingency in the contract (you have to sell your home first), and your home does not sell in a certain amount of time then you can get out of the contract and get your money back (of course this one takes time -- because you usually have 1 or 2 months to sell your home first) and is usually out of your control anyway.

You definitely need to make an informed decision and not jump into any house. Good luck with it.

Answer 3

The only way to get your money back is if the house fails to meet some sort of requirement you'd specified in the contract. SO - if you said you'd accept $2000 worth of repairs and the inspector says it would cost $4000 to fix things, you can back out of your contract then. Otherwise, you lose your money - you've basically taken this house off the market, people aren't being shown the house when they're house hunting so the seller is losing money on the deal if you back out - this is their way of being compensated.
It's great that you want to make an informed decision, but you didn't - so you have to pay the price for backing out, or buy the house.

Answer 4

You probably can't get yousr earnest money back if you just changed your mind - that's what earnest money is, it's a deposit that you generally lose if you back out of the deal.

Most purchase contracts have contingencies in them, where you CAN get your deposit back if for example you can't get financing. Read those papers you signed and see what it says. Be aware that the realtor will probably work hard to get you financed to meet the contract restrictions, since they won't get their commission if the deal doesn't close.

Answer 5

Yes you can.
First way is after the home inspection, f you do not like what you find out you can leave the deal or change it.
2ND is if you are denied for the loan.
Both ways ou can get your money back. There may be some other ways to do it, Try talking to the seller and see if they will give you back your money. Talk with your Realtor, only if they are not a duel agent. I hope this helps

Answer 6

Unless you can base the request for return of your money on a contingency that you but in place prior to signing the docs, then most likely not.

Answer 7

You are forgetting the definition of "earnest". You put that money up to earnestly show the seller tha they can take their home off of the market. You are reneging, the money is theirs now to compensate them for your BS.

Answer 8

No, you forfeit the earnest money if you change your mind.

Answer 9

Talk to your real estate agent. Most agents write in contingencies, just in case. Your agent will help you...that what they are for!

Answer 10

technically no.