Ever signed a real estate contract and then had second thoughts? Life happens. Maybe your financing fell through. Perhaps the home inspection revealed major issues. That’s where a “Sample Letter To Cancel A Real Estate Contract” comes in handy. It’s a formal way to back out of the deal.
This article helps you write that tricky letter. We know it can be stressful. That’s why we’re sharing examples and templates. Think of them as your starting point.
We aim to simplify the process. Use our samples to craft your own cancellation letter. Make it clear, concise, and legally sound. Let’s get started.
Sample Letter To Cancel A Real Estate Contract
[Your Name]
[Your Address]
[Your City, State, Zip Code]
[Your Email Address]
[Your Phone Number]
[Date]
[Seller’s Name]
[Seller’s Address]
[Seller’s City, State, Zip Code]
Subject: Cancellation of Real Estate Contract for [Property Address]
Dear [Seller’s Name],
This letter serves as a formal notification that I am cancelling the Real Estate Contract for the purchase of the property located at [Property Address], dated [Date of Contract].
My decision to cancel is based on [State the reason for cancellation. Be specific. Examples: the unfavorable results of the property inspection; my inability to obtain financing; a contingency outlined in the contract that has not been met].
According to the terms outlined in the contract, specifically section [Mention specific section of the contract that allows for cancellation, if applicable], I am entitled to a full refund of my earnest money deposit. Please arrange for the prompt return of my deposit in the amount of [Amount of Earnest Money Deposit].
I request written confirmation that you acknowledge this cancellation and will process the return of my earnest money within [Number] days.
Thank you for your time and attention to this matter.
Sincerely,
[Your Signature]
How to Write Sample Letter To Cancel A Real Estate Contract
1. Subject Line: Be Forthright From The Outset
Begin with a subject line that unequivocally declares your intent. Clarity prevents misunderstandings. A convoluted subject line can obfuscate your goals, leading to delays and potential legal quagmires.
- Example: “Cancellation of Real Estate Purchase Agreement – [Property Address] – [Your Name]”
2. Salutation: Addressing the Recipient
Use a formal salutation. Err on the side of formality; it demonstrates respect and seriousness.
- Address the seller or their agent directly.
- Examples: “Dear [Seller’s Name],” or “Dear [Agent’s Name],”
- If unsure, use “To Whom It May Concern:” as a last resort, but aim for directness.
3. Introductory Paragraph: State Your Intention Plainly
The first paragraph should be succinct and unequivocal. State your intent to rescind the contract, referencing the specific agreement.
- Clearly state you are canceling the contract.
- Reference the date of the original agreement.
- Include the property address for absolute clarity.
- Example: “This letter serves as formal notification that I am cancelling the Real Estate Purchase Agreement dated [Date], concerning the property located at [Property Address].”
4. Grounds for Cancellation: Justify Your Recission
Detail the reason for cancellation, citing specific clauses or contingencies within the contract that permit termination. Absence of a valid reason could render cancellation ineffectual, opening you up to legal repercussions.
- Reference specific clauses (e.g., inspection contingency, financing contingency).
- Explain how the contingency was not met.
- Be precise; avoid vagueness.
- Example: “This cancellation is based on the inspection contingency outlined in Paragraph [Number] of the agreement. The inspection revealed significant structural issues rendering the property unsuitable.”
5. Return of Earnest Money: A Stipulation for Resolution
Explicitly request the return of your earnest money deposit, referencing the method of repayment. Omitting this detail can prolong the process and create unnecessary friction.
- State that you expect a full refund of your earnest money.
- Specify the method of refund (e.g., certified check, wire transfer).
- Provide necessary details for the refund (e.g., mailing address for a check).
- Example: “I respectfully request the full return of my earnest money deposit in the amount of [Amount]. Please remit payment via certified check to [Your Mailing Address].”
6. Closing Paragraph: Reiterate and Express Availability
Reiterate your cancellation and offer availability for further communication to ensure a seamless dissolution of the agreement. A proactive approach can mitigate potential disputes.
- Reaffirm your cancellation one last time.
- Offer to answer any questions.
- Include your contact information (phone number and email address).
- Example: “To reiterate, I am cancelling the aforementioned Real Estate Purchase Agreement. I am available to answer any questions you may have. You can reach me at [Your Phone Number] or [Your Email Address].”
7. Closing: Ensure Professional Demeanor
Close with a professional valediction and your signature. This reinforces the formal nature of the communication.
- Use “Sincerely,” or “Respectfully,”
- Sign your name above your typed name.
- Date the letter.
Frequently Asked Questions: Cancelling a Real Estate Contract
This section addresses common queries regarding the cancellation of real estate contracts. Understanding your rights and obligations is crucial when considering contract termination.
What are the common reasons for cancelling a real estate contract?
Common reasons include failure to secure financing, unsatisfactory home inspection results, title defects, or breach of contract by either party.
What should a sample letter to cancel a real estate contract include?
The letter should include the date, names of all parties involved, property address, reason for cancellation, specific contract clauses that support the cancellation, and a clear statement of intent to cancel.
Are there penalties for cancelling a real estate contract?
Penalties can vary depending on the contract terms and the reason for cancellation. You might forfeit your earnest money deposit or be subject to legal action if the cancellation is not justified under the contract.
When is the best time to send a cancellation letter?
Send the letter as soon as you determine that you need to cancel the contract, and always before any contractual deadlines pass. Consult with a legal professional to ensure timely and appropriate action.
Should I seek legal advice before cancelling a real estate contract?
Yes, seeking legal advice is highly recommended. An attorney can review your contract, advise you on your rights and obligations, and help you navigate the cancellation process to minimize potential legal or financial repercussions.
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