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Home Q&A Forum Are there cancellation fees in purchase agreements?

Real Estate

Purchase Agreement

New York

Asked on Nov 2, 2023

Are there cancellation fees in purchase agreements?

I am currently in the process of purchasing a home and I have been presented with a purchase agreement. I was wondering if there are any cancellation fees included in the agreement, as I would like to make sure that I am aware of all the terms and potential costs associated with this purchase. I want to make sure that I am fully informed before I make a final decision.

1 Attorney answer

Answer

Real Estate

New York

Answered 257 days ago

Damien B.

ContractsCounsel verified

Business Lawyer
Licensed in New York
Free Consultation

Hello! I understand you are entering into a Purchase Agreement and want to know whether there are any cancellation fees. First, you would read the agreement to see if there is any mention of termination/cancellation fees such as the loss of the down payment if the buyer attempt to terminate the contract. But, generally, the agreement is binding contract. So, if a buyer attempts to cancel the contract, it could be considered a breach of contract. In that situation, the seller can claim damages, which usually results in a loss of the down payment but also could lead to other monetary claims or a claim to attempt to force the buyer to fulfill the purchase (general called a specific performance claim). Separately, in most cases, if the buyer's ability to purchase the property is dependent on getting a secured loan, usually there would be no cancellation or damage claim and the buyer would have the right to the return of the downpayment (this should be outlined in the contract and is usually referred to as a contingency clause). I hope that helps.

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