Home Buying in Michigan>Question Details

Cutep, Home Buyer in River Rouge, MI

Can I cancel the contract if my agent was dishonest about closing cost and taxes. We explained to him we didn't have money for these things.

Asked by Cutep, River Rouge, MI Sat Apr 9, 2011

We explained we only had a certain amount of money and was told we needed no money for taxes, water or closing cost. We explained we were working with a certain amount of funds and the bank will pay for these items. Now that it's time to close the agent said we needed an additonal 1100.00 for these things.
Is there something we can do about this? Agent said "WE CAN JUST WALK AWAY". Will we loose our earnest
deposit if we cancell contract

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Answers

6
No one here can tell you if you will lose your earnest money. It is really up to the seller, and none of us has read the contract. Nor are we attorneys. Your earnest money is likely in jeopardy, but the seller makes the call about what happens.

You mentioned water in both posts. Usually there should be a zero water balance when the buyer gets the home. The bank addendums might say something else. Read the contract to find out.
0 votes Thank Flag Link Sun Apr 10, 2011
Maureen Fran…, Real Estate Pro in Birmingham, MI
MVP'08
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Hi Cutep:

I'm sorry this experience has been so distasteful for you. It is your lenders responsibility to explain all of the costs involved in purchasing a home. If you needed more money then you had your agent could have asked for sellers concessions in the purchase agreement to assist with closing costs. You will have to read your purchase agreement to see if you would have to forfeit your earnest money deposit. If you can not qualify for the mortgage because you don't have the funds to close there may be an issue there as to whether you would lose your deposit. I would advise you talk to a Real Estate attorney and/or the agents broker to get this explained.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
0 votes Thank Flag Link Sat Apr 9, 2011
Cutep
Seems to me the mortgage person would of told you about the mortgage, taxes and insurance and those items would of come up from the very beginning. Also your agent should of given you an idea what the closing cost were going to be. Did you work with a Realtor? That seems strange that they would tell you there are no closing cost. Read the contract in full to see what the provisions are for walking away, but you probably will lose your EMD. Do speak to the agents Broker and try to work something out.
There are other things you could of done when writing the offer to get the closing cost taken care of.
Sorry, this is not the norm.

Good luck
0 votes Thank Flag Link Sat Apr 9, 2011
As for walking away and escrow refund-- review the contract as the answer can be found in the document, or consider consulting with an attorney who specializes in real estate; also consider expressing your concerns to the agent's broker owner and or office manager...curious to know, didn't your loan officer give you a good faith estimate as to closing costs...
0 votes Thank Flag Link Sat Apr 9, 2011
I'm so sorry to read you are in this situation. A contract can be exercised. You will need to read your contract to understand your rights and options. Usually contracts (in California) state that the buyer confirms they have sufficient funds to close and that is not a contingency.

As Tim stated, lenders are held to a standard and they must provide to you your estimated closing cost. Some loans will not allow anyone else to pay for re-curing cost, such as your taxes, etc. Yes, meet with the Broker and the Lender to see how this is going to be resolved.
Web Reference: http://terrivellios.com
0 votes Thank Flag Link Sat Apr 9, 2011
You always have the option to up and walk away, and you would loose the earnest money deposit if you did. I think I would be just as mad at your loan officer who should, and I bet did, provide you with an estimate of closing costs. The lender is the one who decides what closing costs are needed and they should have explained it to you. Unless the lender backs off some of the costs, someone has to pay them. Maybe your agents can help too. A visit to your agents broker might be something you can do to get more options. Good luck.
0 votes Thank Flag Link Sat Apr 9, 2011
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