The exchange of contracts is a crucial moment in the property buying process. Once contracts are exchanged, both parties are legally bound to complete the transaction. But what happens if you back out after exchange of contracts?
Firstly, it`s important to understand that once contracts are exchanged, you are legally obliged to purchase the property. If you decide to back out, you will be in breach of contract and may face financial penalties. This could include losing your deposit or being sued for damages.
The seller may also have the right to keep any money that has been paid towards the purchase of the property. This could include the deposit, as well as any legal fees or other costs incurred during the purchase process.
If you are unable to complete the purchase due to unforeseen circumstances, such as job loss or illness, you may be able to negotiate with the seller to either delay completion or cancel the transaction altogether. However, this will depend on the terms of the contract and the situation at hand.
It`s important to remember that when purchasing a property, you should only exchange contracts when you are completely certain that you want to go through with the purchase. If you have any doubts or concerns, it`s best to speak with a solicitor or professional adviser before committing to the purchase.
In conclusion, backing out after exchange of contracts can have serious financial consequences. It`s important to be fully committed to the purchase before exchanging contracts, and if you do encounter any unexpected issues, seek professional advice as soon as possible.