Home Buying in Austin>Question Details

Becky0208, Home Buyer in Austin, TX

If I have final approval for an FHA loan and the seller backs out can I get a different house?

Asked by Becky0208, Austin, TX Sat Jul 7, 2012

I got approved for an FHA loan and the lender needed more time for final underwriting to get my final approval. I had an original close date of the 29th and he had to move it to the 9th. I paid the seller 1300 more earnest, on top of 2000 original, to extend to the 9th of July. Well I only got my approval with conditions on Friday. I complied with the the conditions but now the lender says he needs another week or more to close. The seller said she won't extend again. I guess I am about to lose 3300 dollars and the house I wanted. I think my realtor and lender screwed up by only extending until the 9th when the lender knew he wouldn't be able to close it. My realtor said he hoped with my final approval that she would extend again. What??? Anyway, my question is since I have my final approval can I just transfer it to another house. That is if I can come up with more earnest money. Uggg.

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Steven Nusinow’s answer
Johnie gave a great answer, so this should work out for you. In fact, in the grand scheme of things, this is just a short extension with a holiday week in there(with the holiday in the middle of the week which often leads to an entire week of vacation for people)

Often times in the real estate world, a closing date should be treated as a "target date" because there are many other parties involved(title, insurance, lender, etc.) I don't know the specifics of your transaction, but if you are still working within a relatively reasonable escrow period with good communication and good faith efforts....you should be able to close on your first choice.

One other thought, can you have the sellers/seller's agent call your lender for updates?
1 vote Thank Flag Link Sun Jul 8, 2012
BEST ANSWER
Have your agent talk with the Sellers Agent, You should be able to work this out.
Here are some key points.
*Seller would have to wait another 30 days instead of a Week
*You are in Final conditions
*Seller would have to go through the stress of getting another offer and then the whole inspection process all over
Keep in mind I understand the disappointment of not closing on time! This is Real Estate and market is busy, Deals are not closing on time.
Take a deep breath and get agents to talk to each other, Sellers agent should keep this deal alive and it will be a win win!!

Johnie Borgeson Realtor / Zip Realty
0 votes Thank Flag Link Sat Jul 7, 2012
That is how I feel. I am just praying that she was just angry like I was when I found out and that she will look at this more realistically. But I haven't heard anything from my realtor. He doesn't seem to keep me updated or have comforting words the way I think he should. I'm a first time buyer and I guess I expected my hand to be held a little bit. Thank you for the kind and encouraging words.
Flag Sat Jul 7, 2012
That is expensive for you do so....

1. Loss of current money paid on this home
2. Inspection fees
3. Appraisal fees
4. Waiting for lender to approve that sales contract

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
Multimillion Dollar Sales Producer
972-699-9111
http://www.lynn911.com

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1 vote Thank Flag Link Sat Jul 7, 2012
I should have never trusted them and gave her an additional 1300. How can she just walk away when I just need another week. I can't just give up, I have my apartment packed up and two kids.This whole process has been an awful experience.
Flag Sat Jul 7, 2012
No.
You will start the process over with new home.

Hopefully with a lender that doesn't keep extending closing.

Hopefully it doesn't get that far and they extend again.


Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends(Really!!)
tomburris@dallasloanguy.com
Lending all across the entire Great State of Texas!!
NMLS# 335055
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0 votes Thank Flag Link Mon Jul 9, 2012
You really need to have your agent work for you here. Pressure the lender to give you something in writing.

If you lose this house you will need to submit another loan with the lender. Each loan is tied to a specific property. You should speak with your lender to see if you do have any options should you need to start the home buying process again from the beginning. Possibly they can keep the loan open again. There are things that will need to be updated and changed along the way so this is a question you need to ask your lender about.

Hope this helps.

_______________________________________
Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
0 votes Thank Flag Link Mon Jul 9, 2012
I don't know if you can blame the agent unless the lender told them they would not make the date. The agent sounds like they are defending the loan officer, however, as an agent I only know as much as the lender tells me. If the lender tells me they need an extension for a certain numbers of days, that is what I ask for. Either way it makes more sense for the seller to extend a few more days instead of waiting for another buyer and waiting for that buyer to qualify. However, If there is a lot of demand for the house and the seller has back up offers they might want to take the $3300 and go on to the next buyer, that could end up being more profitable for them, although not a very nice thing to do. The seller would not be backing out of the deal though, instead you would Likely be in default (consult an attorney for advice about default of a contract) and therefor the seller would have a claim to the earnest money.

Should you fire the lender and the agent? I don't have enough information to even be able to advise you on that (not withstanding ethically I cannot advise you how to fire your agent). However, if your loan was a hard loan to get approved and this lender does indeed get it done then it might make sense to stay with them. You will have to go through the approval process again with the new house because they will need a new appraisal and lots of other items. The good news is if this lender can get your file to the same underwriter that approved it the first time you should have all the documentation in your file and be able to get through the process faster and easier the second time.
0 votes Thank Flag Link Mon Jul 9, 2012
Keep in mind that the seller is not necessarily backing out, as seller's generally have few available options to "back out" of a sales contract except in the event the other party breaches the contract. If you fail to meet your contractual obligations, even due to the fault of your agent or lender, the seller likely have the option and right to try and locate another purchaser, which may or may not be a good decision on her part.

Regardless, if this doesn't result in a purchase for you, I would recommend you seek out another lender and another agent to assist you as it sounds neither of them may have performed well to date.
0 votes Thank Flag Link Sun Jul 8, 2012
The person asking the question states that the seller has backed out. If this is true and final, the answer to the question is YES. Your loan can be used for another FHA loan, provided the new house being purchased can result in a base loan amount that is within the county limits for its location. It is true that you may have lost your earnest money and that a new house will require a new earnest money deposit, option period funds (optional) and inspection fees (optional), as well as a new appraisal, but the point is that the loan that was processed will only need to be attached to the new property with a new FHA case number. DreamLoan.pro
0 votes Thank Flag Link Sun Jul 8, 2012
Thank you. According to my realtor she gave my lender til Tuesday and I only got my final with conditions on Friday. Conditions have been met but according to the lender he needs at least another week. She says she won't wait any longer. I am hoping she is just angry but I haven't heard anything different since then.
Flag Sun Jul 8, 2012
Have your agent speak with the seller's agent. If they've come this far and know the loan is processing but won't extend they are idiots! It happens, I've met some dumb sellers. Just get your agent to be proactive about working it out.
0 votes Thank Flag Link Sat Jul 7, 2012
I think the listing agent is probably concerned as to why you could not close after a ten day extension. This really is the lenders issue. They should have told u a better estimate for the initial extension. It probably is the holiday getting in the way along with the lender being busy. i recently had a similar experience eith s transaction and it is one thing to ask for one financing extension but to ask for a second really is pushing it Your realtor really needs to push the lender to get this done in a timely manner. Do u have any extenuating circumstances such as a recently filed amendment to a tax return? If your income changes while u r in the process that could jeopardize everything for you. But if you really are qualified for the home and all this is is Your lender not getting it thru underwriting due to the holiday, your realtor just needs to express this to the listing agent n work it out as that is too much money to let go of. Also your lender needs to get in ninth gear to work this through for u. Charlotte Brigham Turnquist Partners 5124235707
0 votes Thank Flag Link Sat Jul 7, 2012
Nope, absolutely nothing on my end. I thought it was crazy that it didn't close with a 10 day extension as well. And the things that were on my conditions were rediculous things that should have been caught during the two sessions of pre-underwriting. He says that the bank is really slow and yes the holiday through everything off but these are things you should already know. Even my realtor should know that after pre-underwrite that you go into final for 5 days and most of the time it comes back with conditions but then good to go. I found that out on my own from the internet. I understand that I had zero fico but everybody knew that from the beginning. I do feel neglected through this situation but at the same time I keep getting told this is normal. I just want it to work out but I just don't feel like I can trust who I chose to work with on this. Not much I can do at this point except pray for the best.
Flag Sat Jul 7, 2012
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