What happens if the housing market changes after you’ve signed a contract?

Worth Noticing
What happens if the housing market changes after you’ve signed a contract?

Imagine you sign a contract to buy a home for $600,000, but your closing isn’t for another six months.

Scenario #1:
Home values increase by $50,000 before closing.
Would the seller ask you to pay another $50,000?
Most people would probably say no.
Now let’s reverse it.

Scenario #2:
Home values decline by $50,000 before closing.
Would the purchase price automatically be reduced?
Most real estate contracts don’t work that way. Once buyer and seller agree on a price, that price generally remains in effect unless both parties voluntarily agree to change the contract.
A contract provides certainty for both sides. Sometimes market changes benefit the buyer. Sometimes they benefit the seller. Neither outcome changes the agreement that was reached when the contract was signed.

One final question…
If the home’s value increased before closing, would you voluntarily offer to pay more than your agreed purchase price?

Probably not.

That’s what makes this such an interesting real estate question.
Have you ever wondered how this works?

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