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Category: Legal
Satisfied Customers: 53574
Experience:  Licensed attorney helping individuals and businesses
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If a buyer needs to cancel a real estate contract in California

Resolved Question:

If a buyer needs to cancel a real estate contract in California after all contingecies have been removed, what is best way to complete the cancellation of contract/escrow as to not be liable for any potential repairs the seller may have already made to the property? Buyer no longer qualifies for loan due to drop in credit score.
Submitted: 6 years ago.
Category: Legal
Expert:  INFOLAWYER replied 6 years ago.
If there was a mortgage contingency and borrowe cannot qualify, borrower/buyer should notify the seller immediately in writing and supply proof if asked and demand immediate return of the down payment.
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Customer: replied 6 years ago.
The loan contingency was removed; we've already notified seller that buyer no longer qualifies for loan-however they want a signed cancellation of contract. That form requires you to reference which paragraph of the contract you are referring to to cancel and requires you must address the release of deposit; only buyer release states that buyer releases deposit less sellers fee's and costs. Unsure if seller has made any of the agreed upon repairs as those were just agreed to last Tuesday; same day ALL contingencies were removed.
Expert:  INFOLAWYER replied 6 years ago.
But unless the contract expressly states that buyer will cover repairs if does not close, buyer should not concede paying for those as seller remains with the property and the presumed increased benefit and value resulting from the improvements.