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with the HOA information. If they fail to do that within the allotted time you can cancel the contract and have the earnest money refunded. If the seller meets the deadline but the buyer doesn't like the restrictions, fees, etc. associated with the HOA the buyer can still cancel within 7 days of receiving the information.

If the sale involves a mortgage the contract included a Third Party Financing Addendum. This addendum gives the buyer a certain number of days in which to arrange for financing. If you can't get the mortgage for some reason, the lender will give you a loan declination letter. That is another "out" possibility. But, again, everything depends on timing. If you miss the deadline, you're out of luck.

If you miss all the deadlines and still want to cancel the contract you can probably say goodbye to your earnest money. Your Realtor can whine and moan and kiss the seller's agent's behind and hope that, out of the goodness of their heart, the seller will return your earnest money. But don't count on it. And if the seller is one of those people with an attorney's number in their speed dial you may be in for more trouble. You're in default of the contract and in addition to keeping the earnest money, the seller can sue for "such other relief as may be prescribed by law." Sound vague? You bet it is. Lawyers like vague. Realtors don't. So the best advice is don't break a contract. Make sure you really like the house and can afford the payments before you sign on the dotted line. If you have questions, ask them. If you don't like the answers, don't sign. If you feel pressured, take a step back and wait a day before you make the offer. You might lose the house, but it's better to risk that than a lawsuit.

Learn more about this author, Stanley Teater.
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