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How binding is a North Carolina purchase agreement on a home?

On Behalf of | Nov 4, 2020 | Real Estate |

Every step in the process of purchasing a home in North Carolina is relatively formal. You will often need to speak with a seller or their real estate agent in order to view the property unless you attend an open house. You will have to express your interest in writing and will typically need to formalize an offer quickly, especially on particularly good properties or in competitive markets.

Submitting an offer on a home is exciting and also nerve-racking. It is also somewhat binding, which means you could lose money if you decide to back out of the transaction after you submit an offer. The better you understand how the process works, the easier it will be for you to make decisions that protect you during the process of buying a home.

Your earnest money may not get refunded if you don’t buy the house

When you make an offer on a property, you will typically submit a formal, written offer that describes not only the price you are willing to pay for the home but also certain other conditions, such as when you expect to take possession of the property and other specifics.

In order to prevent sellers from the hardship and inconvenience caused by people who change their mind, the deposit of earnest money, which often represents several thousand dollars, is a common practice. Earnest money, as the name implies, shows the seller that you are earnest and sincere in your offer.

Provided that you move forward with the closing and complete the purchase, the earnest money goes toward your downpayment and other costs associated with the purchase. If you back out in a way that violates the terms of the offer you made, the seller can most likely keep your earnest money.

Adding your own terms to the offer can protect you from the loss of your earnest money

You have the right to include your own terms or conditions when you make an offer on a property. Common contingencies include requiring that the property passes inspection or appraises for a certain value. If you have to sell the home that you currently live in, the contingencies in your contract could include that you sell your home within so many days.

Including contingencies will give you a way to back out of the contract if something goes wrong without losing your earnest money or facing other potential legal consequences.