the contract is a legally binding agreement, and both parties must perform their contractual obligations or risk a lawsuit for breaching the contract. the law is a complicated thing, however, and there are circumstances under which a seller may have the option of backing out after all. a sales contract between you and the seller is a legally binding agreement, but don’t assume the deal exists just because you both signed on the dotted line. in california and other states, a contract isn’t legally binding until something of value gets exchanged. as a buyer, you probably wanted to put some safeguards into your contract. you may have, for example, added a contingency stating that you may cancel the sale if your current home fails to sell or if your mortgage financing falls through. the standard residential purchase agreement published by the california association of realtors, for example, contains a clause permitting the seller to cancel if the buyer fails to deposit certain monies into escrow by a specified time. if a seller cancels the sale under a viable clause in the sale contract, you must generally accept the cancellation and move on.

when the homeowner has decided they want their house listed for sale, they will contact a real estate agent to help them. with the help of their agent, buyers have to find a price that will be acceptable to the seller. a contingency is a clause that needs to be completed before the home sale can be finalized. sometimes a buyer will try to make the sale of their current home a contingency. contingencies have to be met before the home will get a new owner.

however, the sale is not yet final as there are a number of things that need to happen before the closing. the lender is motivated to have an appraisal to make sure that the amount of money that they are loaning to the buyer for your home is a fair market value. in general, though, you will need to ensure that the following actions are taken once you are under contract on a house. as the buyer, the home inspection is a wonderful opportunity for you to understand what exactly it is you are buying. usually, there are pre-closing documents that you will need to take a look at and sign.