Buyers may back out of home sales using contingency clauses for valid reasons such as inspection issues, financing problems, or title disputes. Contracts typically allow refunds of earnest money if contingencies are invoked. If buyers fail to secure financing or encounter unresolved title defects, they can legally exit the deal and receive their deposit back. Conversely, withdrawing outside of these contingencies may lead to the forfeiture of earnest money, protecting sellers against potential losses.
Valid reasons buyers can back out of a contract include issues highlighted by home inspections, financing problems, or unresolved title disputes. Buyers may invoke contingencies to exit contracts with their earnest money intact.
Without valid reasons to withdraw from a contract, buyers may forfeit their earnest money. Sellers typically retain this deposit to cover losses incurred due to the withdrawal.
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