Buying a home in Maryland is not an easy process. If you have found a property in Frederick County or beyond, you may want to move quickly to secure it as your own. However, there are some steps you should take carefully, and among the first is to understand and sign the sales contract.
The sales contract is a legally binding agreement between you and the seller of the property. In addition to containing a description of the property and the agreed upon price, your sales contract may also include a list of contingencies. These contingencies allow you or the seller to cancel the sale under certain circumstances.
When is it okay to walk away?
While it may not be pleasant to know your sales contract allows an out for the seller, it may comfort you to know that you, too, will not be legally bound to buying a house if something should come to light that changes your opinion of the purchase. You may wish to cancel the sale under any of the following circumstances:
- You discover you have not qualified for a loan to purchase the property.
- The property’s appraisal comes in much lower than you anticipated.
- You learn that the home is located in an undesirable location, such as near a farm or airport.
- The house is listed as a short sale, and the seller’s lender does not accept the offer you make for the property.
- A home owners association governs the neighborhood, and after reviewing the HOA disclosures, you decide the community is not appropriate for your lifestyle.
- You are unable to sell or lease your existing home under the contract’s deadline.
Perhaps the most common contingencies are those related to the home inspection. Your contract can allow you to back out if the inspection report reveals major defects even if the seller offers to repair them. These defects can relate to any of the major systems of the house, including the roof and foundation, as well as environmental concerns such as mold or insects. Even if you purchase a home as is, you may include an inspection contingency.
Contingencies in your sale contract may be just the beginning of the negotiating skills and legal savvy you may need to get the best deal on a house and to ensure your purchase is in full compliance with Maryland laws. Since state law requires you to use the services of an attorney for your real estate transaction, you will certainly want an advocate who will work for your best interests through every phase of the purchase of your new home.