How To Articles
How to Cancel or Re-Negotiate a Real Estate Deal? Part II
By
Jan 6, 2006, 02:35

Another source would be to call both your state's real estate department, and the state s real estate department where you are looking to purchase. They may be able to answer your questions. Of course, all of this can be avoided by making sure you never put yourself in a situation in which you want to cancel.

Having said all that, my next point is that if you are ever faced with the situation in which you must cancel, and even if legally you do not have the right to cancel, practically speaking you are almost always in a position where you are able to cancel. The reason is that most contracts are written to say that in the event the buyer cancels, the initial deposit is to be kept by the seller as liquidated damages. 

The problem with this from the seller's standpoint is that if it ever goes to court more than likely the judge is going to ask the seller if he couldn't have sold the house, the lot, or the condominium unit to somebody else for at least equal price. And, the developer or seller will have to admit that such is the case, in which event the judge will find there really are no damages, and if there are, they are certainly not in the amount of the deposit. I caution you that you never are one hundred percent sure what is going to happen in court. It's all up to the judge's understanding of the circumstances and the law. This is something the developer knows better than you because he has probably been through this a few times. 

The main reason I am telling you that you are probably a ways in a position to cancel, is that this gives you an additional bargaining chip to deal with, when negotiating with the developer. You have been advised not to believe anything that is not in writing, but now, after you have signed the contract, is the time to remember some of the salesperson's exaggerations or omissions and use them to your advantage.

Remember when you walked into that model home and asked the salesperson what was included if you purchased, and the salesperson sort of gave you a nondescript answer? 

Well, now you are finding out the carpet in carpet which that model was an upgraded cost an additional $2,000.00., or that the refrigerator as extra, or that the two-car garage that was attached to the model was an upgrade from the standard car and a half that the home normally comes with? Now is the time to let the salesperson know you are not happy with the lack of full disclosure you got before you made your decision to purchase. He should be told that you are possibly so unhappy that you may talk to your attorney about what is the right thing to do. 

If you are in the mood to make enough noise about all this, you are usually in a position to negotiate a much better price on many of these upgrades. After you purchase a home you usually sit down with someone to talk about what upgrades you want put into the home. Inevitably you are going to find out there are a few things that are upgrades that you had assumed were included in the base price of the model. (You may have been smart enough to know they weren't included, but nobody ever told you that.) If you work this bargaining chip of yours properly, your right to cancel can probably end up getting you a lot of these items at developers cost.

Remember, if you thought you had the salesperson on your side when you had psychologically engaged him into thinking you were going to be a buyer, you've got to know that everyone is on your side once you have actually signed the contract. salesperson, the sales manager, the marketing director, the chief executive officer, the owner and the lender have all reported, and in many cases already spent your anticipated money. It is the buyer who is a pain in the neck who gets all the goodies from the seller. It is not the nice buyer.

If you know you are just not the right kind of person to deal with all of these issues, then find somebody who will. Find buyer's broker or an attorney to handle it for you. By the way, on upgrades, I want to point out that if the developer is looking for a twenty percent mark-up on the house, then on upgrades he is probably looking for anywhere from thirty to fifty percent plus. Which means that the intercom system which costs you an additional $2,000.00 probably comes to him at a cost of $1,500.00, et cetera.