My clients who are seeking to buy a house in Portland often ask this question when they are in the process of making an offer on a house. The question comes up for a variety of reasons. Sometimes the house has some maintenance issues or needs remodeling. Sometimes the buyers are waiting to hear about a job change or a medical diagnosis. Sometimes, they have their eye on another house or want to keep their options open a little bit longer but, simultaneously, don’t want this one to slip away.
Buyers can terminate a transaction in Oregon without consequences, like losing their earnest money (which I’ll be addressing in more detail in a future post) or subjecting themselves to potential legal action from the seller, based upon contingencies that are included in the written sale agreement. The most common of these contingencies are the inspection or due diligence period and financing provisions.
Most transactions will include an inspection or due diligence period during which the buyer has the opportunity to fully investigate the condition of the property, zoning, environmental hazards, and neighborhood or home owner’s association issues. During this time period, which is usually 10 business days but can any length of time and is negotiable as part of the written sale agreement, the buyer may terminate the transaction based on findings related to the inspections. There is an addendum that allows the buyer to unconditionally disapprove of the property giving no further explanation.
If the buyers will be financing the purchase with a mortgage loan, the sale will be subject to both the buyers qualifying as borrowers and the property’s appraisal coming in at the agreed purchase price in a condition acceptable to the lender. A transaction can be terminated for any of the aforementioned reasons with no consequence to the buyers.
If buyers terminate a sale for any reason that is not specifically included in the written sale agreement, the buyers should expect to lose their earnest money deposit which is typically 1% of the purchase price, but can be any amount, and is typically deposited within the first few days after the offer is accepted by the seller, but can be deposited at any time the parties agree.
When the real estate market is hot and buyers are competing with other offers, sometimes dozens of other offers, on the same house, buyers will ask their Realtor to submit offers on more than one home at a time on their behalf. The Realtor can do this if the buyers are actually qualified to purchase every home on which the buyers have an open offer. For example, if Sue and Ted want to make an offer on a $1,000,000 home in Bridlemile and a second $1,000,000 home in Lake Oswego at the same time, they must qualify to purchase two homes with a collective sale price of $2,000,000. Realtors in Oregon are not ethically allowed to present offers on behalf of buyers who are not qualified to purchase the home.
Your Realtor should be able to explain all these details and have a solid strategy in place to makes sure you are able to buy the home you want at the time you want. Protecting your interests and your earnest money are another good reason to hire an experienced, professional Realtor to work for you when buying a home in Oregon.