Experienced real estate investors know that you negotiate when you buy. If you're paying too much or haven't done your due diligence, it's tough because you'll be stuck after the deal closes.
During the time the contract is in place, the buyer still has some wiggle room. Some investors use a few well-worn "weasel" clauses. They'll read something like, "Purchase subject to consent of buyer's attorney." Or a more legitimate clause would be: "Purchase is conditioned on a home inspection report submitted by a licensed home inspector and approved by the buyer prior to closing. The buyer will pay for the inspection."
To be safe, you want to be the one paying the home inspector so the inspector has no doubts about who they are working for.
If the inspection shows the need for substantial repairs, the buyer can restart negotiations with the seller. If they don't agree, the buyer can simply disapprove the inspection report and no deal will be made.
Of course, there are many other things that could legitimately void the deal. How do you officially cancel a contract? Something like the following statement could be submitted to the escrow officer:
1. The undersigned hereby notifies the Escrow Escrow Agent that Escrow Number ___________ is hereby canceled due to material breach by __________ (Buyer or Seller).
2. Material breach is defined in the lines ____________________ of the purchase contract as follows: __________________________________________________________________________________________.
3. Earned money is paid out as follows: _________________________________.
4. I, the undersigned, hereby declare that I am not in violation of the terms of the purchase agreement.
____________________________ (Buyer's signature)
Closing any deal is important and must be carefully considered and executed. Experienced real estate agents may be able to handle this, but it's always wise to at least have your contracts reviewed by an attorney who specializes in real estate. They are wiggle room experts.
