Can I Terminate a Real Estate Contract I've Already Signed?

We frequently receive inquiries from buyers regarding the possibility of terminating a real estate contract they've signed due to a change of heart or because they've found another house they prefer. Firstly, it's important to seek legal advice specific to your situation from your attorney. 

However, in the state of New Jersey, if the contract has been executed – meaning both the buyers and sellers have signed it – there are a few avenues to exit the contract during the attorney review and inspection period. Typically, once a contract has been executed, there is an attorney review and inspection period. Attorney review is 3 business days from the date all parties have signed and the last party received a copy of the executed contract. The inspection period is 10-14 days from attorney review. In most contracts, there is a clause that allows the buyer to exit the contract and receive a refund of their earnest money if they are dissatisfied with something in the inspection report. 

However, this is a matter that your attorney will need to handle before the conclusion of the attorney review. Usually, the buyer's attorney will draft a letter to the seller's attorney stating the buyer's desire to terminate the contract due to inspection issues. When a contract is terminated, both the buyers and sellers must sign a termination of contract and it should list who should receive the refund of the earnest money. Once the attorney review period has concluded, it becomes very challenging, if not impossible, to terminate an executed contract for the purchase of a home.

If you have any questions or want to sell your property, contact me at (609) 948-4306. I look forward to hearing from you.