Tim Bell walks through how to cancel a real estate purchase contract using a Notice of Cancellation form. The form requires the date, parties involved, property address, and offer reference date, and includes language declaring the contract null and void due to inspection findings. The title company typically returns the buyer's earnest money deposit when the cancellation is processed.
Now the last item on our list here is the cancellation of contract. Unfortunately, from time to time it will be necessary for you to cancel a contract. Maybe you can't find a wholesale buyer, or maybe there's some other kind of problem that you can't rectify and you can't go through with the transaction. You may need to cancel. Okay, so as part of a complete package of forms that you're going to need, I'm sending you or I've sent you a notice of cancellation of the real estate purchase contract. Again, I've sent you a filled in one and I've sent you a blank one so you can see what they look like and the blank one for you to use. Basically you can see it has a date. It has to the seller, to the seller. On this or possibly the seller's agent, maybe real estate purchase contract, it talks about the offer reference date, the date that the thing was written. It talks about the address of the property and the buyer and the seller, who the parties are. In the middle it says this is to inform you that the buyer hereby declares the contract canceled null and void. The property inspection performed by the buyer indicates that there are several problems with the condition of the property that preclude the buyer continuing with this purchase in accordance with the provisions of the contract. That's where your title company is. Your title company will return the buyer's earnest money deposit. We regret we're unable to bring this transaction to a successful close. If you have any questions, contact me in my office. Sincerely, you sign it. And then there's a part at the bottom there that you can see where the seller acknowledges the buyer cancellation of the above contract. If you get the seller signature and date on this, you can actually turn this into your title company. In most cases, your title company will return the earnest money deposit if indeed you're entitled to it. So that's what the cancellation is for. Sometimes you're going to have to cancel. That's just kind of the way it is. So I want you to have this tool in case you need to use it.
