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Breaking a contract of any kind is never a good idea. Most people understand that, but when it comes to real estate people are very fickle and buyer's remorse has killed many a deal. So what options do you have if you wake up the next morning thinking "Oh, my God what have I done? I really can't afford those payments."? First of all, hope your Realtor knows what he or she is doing.

Real estate law is not uniform in the United States. Every state has its own regulations and its own way of doing things. I sell real estate in Texas, which is an option state. For most contracts on resale properties in our state, buyers write two checks when they sign the contract. One is the earnest money check which is made payable to the title company where you'll eventually close the transaction. Your Realtor keeps that check in your file and it isn't delivered to the title company and deposited until you have an accepted contract. The other is an option fee which is made payable to the seller. The amount is negotiable and is usually $100 to $250. For more expensive homes, $350,000 and up, it can be higher. The option fee buys you the unrestricted right to cancel the contract for a period of time, usually 7 to 10 days. During the option period you have the home inspected and negotiate repairs if any are needed. If you can't agree on repairs or an adjustment in price you simply cancel the contract and get your earnest money back. The option fee, however, is not returned.

The interesting thing about an option period in Texas is the phrase "unrestricted right" to cancel. That means you don't even have to tell the seller why you're canceling the contract. So if you wake up with buyer's remorse during the option period, just call your Realtor and say you're backing out of the deal. You won't be making a friend when you do that (think about the amount of $3+ gas your Realtor has used showing you houses) but your earnest money is safe. Just make sure you make the decision before the option period is over. If you wait too long things can get rather complicated. And nasty.

The option period isn't the only way to get out of a contract. Keep in mind that the dates in a contract are critical. Certain things must be done in a timely manner or it enables one party or the other to cancel the contract. If you're the buyer and the home is subject to mandatory membership in a Home Owners Association your contract had an addendum that gave the seller a certain number of days in which to provide you

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