In America, almost all of the merchandises that you purchase can be returned with full refunds within a period after purchase as long as there is receipt. From electronics to clothes, from general services to consumer goods. However, there are two kinds of products are kind of exceptional. One is real estate properties like houses, another is car. These products are big items, people usually have done thorough research before purchasing, also negotiations and price bargaining are common practices during the dealings, therefore it is very rare that the buyers will have post-purchase remorse after all of the efforts to come to such a final agreement.
However, there are laws and regulations there to protect the buyers interest in real estate dealings, it is also to ensure the dealings under fair condition. Because we know that fraudulence is part of human nature when it comes to any business practice. So in America, what are the scenarios that the buyers can still walk out of the contract without obligations?
During each stage of the purchase, you can always walk out:
1. During offer stage. When you are dealing with the seller, you may run into counter offers. You may also have some offers that you want to sellers to accept. As long as you feel that there is no agreement, you can always walk out even if you have a purchase contract and get your deposits back.
2. During Appraisal stage. If you are purchasing a property with home loan, the funding is usually about 80% of the price (you are paying 20% down payment), the lender would appraise the value of the property. If the appraised value is less than the listing price, you may not get the loan, hence you are out of purchasing agreement with the sellers.
3. During inspection stage. During this stage, the buyer is inspecting the property before making final decision. If the buyer finds anything that is not satisfying, he can walk out of the contract.
4. During the final walk-through stage. The final walk-through is after the inspection, your last chance to change your mind before the purchase. You can go with your buyer’s agent to the property for one last time, if you change your mind, you can still do so at this stage.
After that, it comes to formal closing, no more protection for buyer’s remorse after this. Once you get the house key, get your title, the house is yours. If you realize the seller was being dishonest or fraudulent after the formal closing, you will have to go through law sues and court.
The things you need to know about buying short sale home
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There is a difference between short sale homes and foreclosed homes. Due to personal financial crisis, home owners (with mortgage) want to sell their properties before forfeiting the title to the bank (foreclosure) , so the seller may negotiate with bank about short selling, meaning the home will be sold at a lower price than the balance of debts secured by property liens, if agreed, the lien holder will release the lien and accept the lower price.
Short sale homes can be a good purchase because it is lower than the market price, however, before buying short sale home, you need to look at a few things.
1. Short sale homes usually takes longer time to process. The original home owner may have more than 1 debtors, even if the short sale price has been agreed between you and the home owner, it still needs to be approved by the lender. It can take more than 4 months for their approval if more than 1 lenders involved.
2. Depending on the competitions from other potential buyers, usually cash transaction is preferred by the bank for their approvals (if there are good competitions from other buyers).
3. You are not restricted by any hold-backs. Banks usually prefer a buyer without no restrictions, can complete the transaction any time and ready to own the home. So don’t appear to have many dependencies in your ability to buy the home (wait for relocation, wait for having more savings etc.)
4. Not all the short sales are approved by the bank, in fact less than half. Therefore, consider getting a good real estate attorney as part of the negotiation will help increasing your chance of having short sale application approved by the seller’s lender.
5. Work with Realtor that have extensive experience in dealing with short sales, this again increase your chance of getting the deal and less headache dealing with negotiation and documents.
6. Ask your Realtor to refer you to title experts. Short Sale homes can have cloud in the title, so title expert will make sure the title of the property is thoroughly researched including any liens. Knowing the title report in advance will save you time and energy to pursue the right thing.
7. Bank can potentially refuse your offer or give counter offers. Your offer is not a sure thing.
8. Bank may change terms on the contract,at anytime, this creates variables in your decision.
9.You are likely to purchase the property as is, its very less likely that the home will be renovated or fixed before selling.
