Failure to disclose - Zillow Real Estate Advice

In many states, both buyer and seller are required to sign a mutual rescission of the purchase agreement in order to cancel the agreement. If the sellers refuse, it would probably be necessary to go the judicial route to cancel the agreement. Otherwise you are technically bound to the contract.

I presume you're also interested in getting back expenses related to the botched sale. Whether or not that's possible can only be answered by an attorney.

Source: http://www.zillow.com/advice-thread/Failure-to-disclose/501180/

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