The most dreaded words a seller can hear: “The buyers want to walk away from the contract.” What now? Can they do that? What will they lose? Sometimes buyers get cold feet. They begin to get nervous about how much their mortgage payment is going to be and should they be buying right now? What if the market starts to decline – will they lose their money? Sometimes they were rejected in their financing or they found another home they liked better.
There are contingencies that are built in the contract that buyers can get out of the contract with. These can include home inspections, financing and HOA documents. These contingencies usually expire pretty soon in the process, so buyers have to decide quickly if they are going to move forward or not. Once the contingencies have expired, the buyer’s earnest money is at risk and will most likely be awarded to the seller if the buyer decides to walk. Depending on the contract, sometimes they can also go after liquidated damages – given certain circumstances. A buyer must not enter in a contract with uncertainty. Once the contingencies expire – their earnest money deposit is at risk.