Home Buying in 61920>Question Details

East, Home Seller in 61920

I have a home that is for sale (not through an agent)in "As-Is"...If the buyer put earnest money down and the bank told her that the home

Asked by East, 61920 Sun Apr 4, 2010

inspection was not to their lending requirments, would I refund the earnest money?

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If you are saying that there are repairs needed on your home in order for the lender to approve the loan, you need to look at:
1. Have you seen the inspection report? What type of repairs, what's the cost? Make the repairs if you can. Keep in mind that if one lender is requiring these to be repaired, chances are every lender will. Unless you have a cash buyer, this will always be an issue.
2. also, I would ask to see the approval from the bank stating that the report is not satisfactory.

If you are saying that the inspection is not done by a licensed or approved inspector, then the buyer needs to get another inspection done. Typically the buyer pays this cost.

If all seems to be open and above board, I would say that the buyer is entitled to their earnest money.
Web Reference: http://www.envision3m.com
0 votes Thank Flag Link Thu May 20, 2010
Read through your contract....is there a "Financing Contingency"? If there is, when is the loan commitment due? "AS/IS" clause doesn't have anything to do with financing but rather the condition of the property.

I would recommend that you speak with your attorney and get his/her advice.

Good luck!
0 votes Thank Flag Link Thu May 20, 2010
WIth out seeing your complete contract the answer is not a clear yes and no. If the offer was made as is,
but with a financing clause, then you should do the right thing, and give back the earnest money. Then again
without seeing your agrement, there is not enough info to give you a clear cut answer. But ask your self, why should you keep it. Were you out any money, did the deal cost you from selling to someone else, And maybe
you could hold your deal together, Find out from the lender why your house did not pass. Might not take much to meet the lender requirements.
0 votes Thank Flag Link Tue May 18, 2010
if the buyer had used a realtor, the purchase agreement would have been contingent on the buyer being able to obtain the loan. I agree that ethically you should return the money. Just another reason to use a realtor.
0 votes Thank Flag Link Sun Apr 4, 2010
If you did not use an agent, did you use an attorney--if so, he/she is your best source of advice--what does your contract state--if in fact they were denied financing due to the inspection and lender requirements, a refund may be in order.
0 votes Thank Flag Link Sun Apr 4, 2010
I don't know what your Purchase Agreement says. Did you use one off the internet? Did you use an attorney to prepare the Purchase Agreement? If you used an attorney, ask him or her. From an ethical point of view, if I was in your situation, I'd refund the earnest money to them, since the bank made the decision.
0 votes Thank Flag Link Sun Apr 4, 2010
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