My Experience of Getting Out of a Non-Contingent Home Buying Clause

charlie_imageFriends, this article is really personal as to my experience about recently buying a farmhouse, and has involved a lot of pain and financial loss for my family. However, at the end of it, I have felt that my experience may resign-ate with other people that might be buying a house and want to get out of it. I hope that my story and experience might help you get through a difficult time and decision in getting out of a home buying contract.

My Story

Iowa FarmLike you've heard me talk about in a number of my articles, I was raised on a farm in Iowa, and loved the experience of working hard, producing a crop, and raising my own pigs. It gave me great joy to see what my hands had produced at the end of the day. I hated my dad at the time for making me work so hard, but after I left the farm I soon realized the experiences I got from the farm planted a seed in me. A seed to work hard and do whatever it takes to get the job done.

Fast forward 20 years, since I left the farm, and I now live the typical suburban lifestyle with a typical single family home, three kids, and a beautiful wife. I'm within 5-7 years of paying off my home and being completely debt free. To say I feel blessed would be an understatement.

Desire to Own an Acreage

Over the past year my family and I have searched for a new home outside the metro area where we live. It has been our desire to own a 3-5 acre hobby farm where we could raise our chickens, goats, dog, and a big garden. I really want my three boys to experience more than the typical lifestyle. I keep telling them, “learn to work hard and you'll never have a hard time finding a job” and “there are plenty of kids that know how to XBOX, twitter, Facebook, and text, but learn to work with your hands and you'll differentiate yourself from every other kid!

So about a month ago we did it! We found our acreage! The price was semi within our price range. The commute to my job was about 15-20 minutes, and had a nice barn on the property! Seemed pretty ideal, so we put in an offer. We went back and fourth and finally settled on a price. Our contract was a non-contingent contract, which meant that we didn't need to sell our home before buying the acreage. We were able to get a bridge loan from the bank, which allowed us to use the equity in our home as collateral to buy the acreage until my primary residence sold.

At the same time we listed our house on the market, and thought “no problem” we should have our house sold in a couple days or just a few weeks. The first weekend we had two visits. One potential buyer, and one real estate agent came through. The agent that went through ended up being an agent that was scoping out our property before she listed the house across the street on the market. Three days after our house was listed, then our neighbors house (which was a ranch and ours isn't) went up for sale for $10,000 less than our and 300 more square feet.

I thought it wasn't that big of a deal until the following week passed. For the next seven days we had no visits, and every time I looked across the street it looked like our neighbors house was showing 2-3 times a day. I left like the ugly guy in high school, and that everyone wanted to date the other guys in my class, and not me! I left like my house was completely unwanted! Gave me a sick feeling in my stomach after a few days of this experience. A week and a half later after only having two showings we were starting to feel extremely unsettled.

The Withdrawal

At that time of going through another weekend with no showings at all, I soon started to feel frustrated and worried about the money. If my house didn't sell, then I would have to carry two mortgages for an unknown period of time. Due to the predicament I put my family in with the non-contingent clause, it didn't matter to my agreement if I sold my house or not. It wasn't contingent on whether or not my house sold, so the sellers had a free road to closing.

Us on the other hand were sick to our stomach of the unknown. Although it was only a short period of time since we listed, I felt completely not in control. For someone who prides them self on being a wise steward of the money the Lord has provided I was having a real hard time with this situation. After two weeks of being on the market, with only 2-4 showings, I started running more of the numbers.

Numbers on how much my increased commute to work would cost. How much my wife's commute to taking the kids to private school would cost. Running what-if scenarios on if my house sold for X amount, then my new monthly mortgage payment would be X. My what-if scenarios were based on $10,000 increments and a 30 year mortgage (which I felt forced into based on the price of the house, how much I could expect from my house sale, and the taxes of the house). As I started to add all of it up, I was starting to realize how much I was locking my family into another 30 year commitment of indebtedness. Although I was getting a pretty ideal farmhouse, it felt like the wrong road I should be going down for what I really believed in. Plus I am looking at having to put my first kid into college in about 7 years.

Getting Out

After running all those what-if scenarios and with the fact that my house wasn't selling quickly I called my real estate agent on March 7 (two days before my home inspection). I called him and said that we want out of our contract, and will give them our earnest money deposit. He sounded understandably disappointed that we were walking out, and said he'd see if he could get us out of our contract. He called us back within an hour and said, “Charlie, they will sue you if you pull out. They bought a house based on your contract and have earnest money down based on your contract. You signed a contract based on specific performance and if you can't fulfill your part of the contract then they can sue you. I wouldn't want that hanging over my head, but it is your call.” At that moment we felt extremely scared and trapped. We called him back and said we'd continue to move forward with purchasing it.

Fast forward nine more days, after spending an additional $500 on a home inspection, and only having three more showings on our house. That is when we felt extremely trapped. Almost like we were in a tank of water and about to drown to death. I couldn't take it any longer! I didn't like feeling like I had any control. I needed to find out if I could really get out of this contract. That is when we got a lawyer. We had him review the non-contingent contract that we signed.

My Lawyer and His Review

After reviewing our contract, he methodically laid out that this isn't a specific performance contract, Charlie. The contract says nothing about the purchase of another house based on you buying their's. The contract says, “That the earnest money deposit is full measure of the damages of pulling out of this contract. If the buyer or seller pulls out for any reason, then the next steps are mitigation and arbitration. They can't sue you for not performing on your part of the contract.

It is at that point that I felt extremely relieved and like I had some options. The next day we pulled the trigger and notified our realtor that we hired a lawyer and wanted to pull out of the contract. That is when our realtor and the selling realtor started to scurry and ask if we really knew what we were doing and asking for his name. They wanted to contact him directly and let him know the full extent of what we were doing. My lawyer methodically laid out the full biases of what the contract says and what each parties rights were in this situation. He calmly drafted up a joint agreement that the earnest money deposit was the full measure of the damages on the contract for having a house off the market for 2+ weeks. He asked that the sellers agree to joint release and keep the earnest deposit. The sellers deliberated for 4 days and asked for some additional money due to losing a certain dollar amount on their earnest money deposit.

After much deliberation and prayer, we decided to pay the extra amount, and jointly signed a mutual release of the contract. All along the way, I was praying for the sellers, and that they would quickly find another buyer for their lovely home. It tore us up that our actions caused them damages, and was affecting their lives as this contract was affecting ours. Luckily within four days of signing the mutual release I noticed that their house came back off the market, and was officially under contract. Big relief and answer to prayer.


At the end of this whole month long ordeal it really taught me a lot about my finances and family decisions. Primarily, it showed me that being debt free is GREATER than owning a farmhouse with a 30 year mortgage. Secondly, I realized that I can show my kids how to be hard workers in my existing suburban home and not have to own a farmhouse. They don't need to be raised in the same situation I was in order to be a hard worker. Finally, my wife and I weren't built for stress in selling a house with a non-contingent offer. Purchasing a home on a non-contingent contract really puts the buyer at a disadvantage and leaves you up to more risk. Before you sign a non-contingent really know the extent of what you are signing and what is the full measure of losses if you decide to get out.

All three of these lessons were extremely hard to learn and costed us a decent amount of money. For a thrifty guy I wish this could have come as a cheaper lesson. :) However, as I sit hear today I can confidently say that I'd rather be where I'm at today ($68,000 away from being debt free), then having a huge mortgage hang over my family's head for 30 years.


I would love to hear from some of our readers in their home purchasing experiences and if you've ever signed a non-contingent contract. Or have you signed a home contract that you couldn't get out of and felt trapped. Leave a comment below on your positive or negative home buying experience. I'd love to hear your story.

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  1. Great article Charlie, very well written and explained. So proud of you and your awesome family!!! GOD will honor your faithfulness.

  2. The lesson I took away from your real estate contract experience was to never sign a contract without a lawyer. Here in New York everyone involves a lawyer from the start in home/real estate buying. I’m aware that’s not the norm everywhere (my brother was a Realtor in Wisconsin for a time) and I’m also aware that involving a lawyer is an added expense, but I believe it is a necessary one.

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