A. The Maryland Realtor (MR) Contract is very clear regarding how you may terminate the contract. Specifically, you are allowed to terminate the contract for the following contingencies:
- Financing – Financing consists of two sub-categories. The first one pertains to your financial background. If anything changes with regard to your credit score or your job status that would prevent you from getting a loan that was applied for when you made the offer, you may be able to terminate the contract. Lenders will pull your credit and verify employment several days before the settlement so please make sure to not damage your credit or lose your job before settlement has taken place. The second sub-category pertains to the home’s value. Banks will conduct an appraisal. If the appraised value is less than the mutually agreed to sales price, and the seller refuses to reduce the sales price to the appraised value, you may terminate the contract. You can still choose to purchase the home if the appraised value is less than the contract sales price. If you choose to proceed purchasing an under appraised home, you may be required to put additional money down towards your down payment. If you have put down a significant down payment, you may not have to put additional funds down. The under appraisal will just result in a percentage reduction of your down payment
- Inspections – You may cancel the contract any time during the inspection contingency timeframe once you have conducted an inspection. You do not have to ask for repairs. If you do choose to negotiate for repairs and the seller does not agree to address your repair requests you can cancel the contract or you can choose to move forward.
- Homeowner and condominium document review – You will have time to review the homeowner documents (5 days) and the condominium documents (7 days) as part of the contract of sale. You may cancel the contract any time during these contingency timeframes.
Outside of the above you are NOT allowed to terminate the contract just because you want to. This could results in legal ramifications.