Understanding buyer’s cancelling purchase rights within contingency time period

Michael Kayem is a Realtor with Re/max Estate Properties Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com.

Dear Michael: I am thinking of purchasing a home that is defined as a Historical Landmark. What defines a home as a “Historical Landmark”? 

Answer: A home is recognized for its history when certain criteria are met. Even when a home meets all the requirements to be considered historic it may take a registry several years before making the final decision on the home’s status. The following requirements are needed in order to qualify historical landmark. A) Age: most registries will not consider a home less than 50 years old. When looking at the age of the house, consideration is also given to the appearance. B) Historical events: The home’s past history plays a major part in consideration for historic status. Homes located in areas known for their place in history such as Gettysburg are easily researched and recognized. C) Persons from History: Important people give status to a home’s claim. Presidents, actors, artists, writers, and architects are just some of the historical figures that give credibility to a house’s history whether time at the residence was for a night or for a lifetime. D) Path to Knowledge: Homes are given consideration for historic status if they can bring forth new information about the past. The information can be counted in several categories including science and religion. E) Distinction: Homes can also achieve a historical rating based on architecture, even if the architecture is out of place. Entire homes have been relocated in order to preserve them. This does not take away from the historical or architectural significance. Purchasing a historical landmark has pros and cons. You will be limited to the amount of remodeling and upgrades allowed to the home. Check with your local municipality to make sure you know what you are up against before you buy this home.

Dear Michael: If I purchase a home that appraises for less then the sale price can I still buy the house? 

Answer: Yes, as long as you make up the difference between the appraised price and the sale price. Mortgage lenders will not lend on a home they cannot re-sell. If you love this home and the appraised price is minimally lower than the sale price then you can consider proceeding with your purchase. The decision is strictly up to you. You also have the option to request the seller reduce the price and agree to the appraised value. If the seller refuses, you can negotiate and meet at a price upon which you both agree. If you and the seller cannot come to an agreement you can always cancel the purchase. Your purchase contract has a written contingency period. There is a clause that allows the buyer to cancel the purchase if the property appraises at less then the sale price.

Dear Michael: My home was in escrow for only four days when the buyer decided to cancel for no apparent reason. Her agent said that her kids talked her out of it. Is the buyer allowed to cancel a purchase for a reason other then stated in the purchase agreement? 

Answer: No transaction is considered firm until the buyers have removed all their contingencies. Buyers have 17- 21 days to remove all their contingencies unless otherwise specified in the purchase agreement. The buyer’s investigation of property condition and approval of all report is the specific contingency that allowed this particular buyer to cancel the sale of your home. If for any reason the buyer disapproves of a report or finds anything wrong with the property they have the right to cancel. The fact that this particular buyer cancelled for no apparent logical reason does not mean that they are not within their rights.

Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310- 390-3337 or e-mail them to him at: homes@agentmichael.com.