Q: How could I back out of a house purchasing contract due to the impending housing market downturn due to COVID19?
A: Retain counsel to review the contract to determine your rights and your risks. They are not all the same. Often, you can simply abandon your deposit, but sometimes, they can sue you for the difference between what you agreed and whatever they sell it for plus all of their added expenses.
How do you know the real estate market will crash after Covid-19 is over?
A: Your potential remedies are written in the contract. It depends on the available contingencies, and whether they have expired, and what may constitute a default. However, a change in the market after a contract becomes specifically enforceable is rarely grounds to back out. But this is America, and you are always free to breach a promise and pay the consequences. We have had clients willingly back out of valid and enforceable contracts on negotiated terms, or on acceptance by the other side of the deposit as a penalty.
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