This is often referred to as the , clause. A more empathetic buyer may choose to release them from the contract in those circumstances. Can a buyer back out during the option period? Happened in Houston. Home equity line of credit (HELOC) calculator. If the parties do not agree to pay for the lender required repairs or treatments, this contract will terminate and the Earnest Money will be refunded to Buyer. This means that a seller cant get cold feet and legally back out of the contract for the reason of sentimentality (or acquiring a better offer as a backup). Now the seller got a higher offer and signed a contract with that party as well. Darby Grimmett of Keller Williams Realty said, With a contingency contract, the seller can give notice to the buyer that another offer has been received or considered. Yes, a buyer can back out for any reason during the option period. This new legislation will potentially offer more protection and peace of mind for individuals and entities conducting business with series LLCs Read More , When Damage Occurs Before Closing on a Property, When youre buying a property, you might justifiably feel like youre in limbo while its under contract. Like with the Termination Option Period, they could wake up on the wrong side of the bed on day 7 and decide they don't want the house anymore. Two days before we close we are told by the mortgage company not the seller or their agent, that they need to delay closing because thier house has not sold its not a contingent contract. If the reason falls within the contracted agreement, the buyer will get the earnest money back, Ashley Donohoe, Personal Finance Writer at PocketSense. If buyers cancel simply because they got cold feet, but the only contingency left is the mortgage loan and they qualified to purchase the home, then it would be difficult for them to keep their deposit, says Albert. Our editorial team does not receive direct compensation from our advertisers. For example, if the contract effective date is March 1, the option fee must be paid by 11:59 p.m. March 4. //