Is it okay to back out of buying a home at this stage?

Question

This is my first time trying to buy a home. I put an offer for one today through my agent and the seller accepted within a few hours. I haven't gotten to pay the earnest money yet or the inspection. Something came up and now I can't go ahead and continue the buying process. I asked my agent if I can back out now but he said there may be some ramifications. I don't completely understand what he means by that. What's the worst-case scenario?

Answer 1

People back out of buying homes all the time in almost every market. In fact, that is why the earnest money period exists, so that a buyer has time to do their due diligence. But since you have not even paid the earnest money or the inspection fee, you have no obligation to move forward. Many times, there is the opportunity to buy an option (for $10-$20) at the time of your offer that permits you to back out before you have to pay the earnest money. If you paid this amount, then that is the only thing you will forfeit. There are no other financial ramifications. As for your agent, they likely want to close the transaction so that they can get paid plus it hurts their reputation if their clients are regularly backing out of transactions. Remember, real estate runs on reputation and trust, so depending on your relationship with your agent, they may decline to work with you if they feel your reasons for backing out are not just.