Home Buying in Diamond Bar>Question Details

Mary, Other/Just Looking in Diamond Bar, CA

My parents back out the gift money for my buying a home downpayment now. already enter escrow. Can I back out the purchase agreement contract now?

Asked by Mary, Diamond Bar, CA Tue Feb 22, 2011

I have signed a purchasing new home agreement contract two weeks ago. Last week, my parents signed a gift letter for my down payment. I already enter escrow. Now I just started the load paper. Today my parents called that they can not give me down payment anymore. Without their gift, I will not have enough for down payment.

1. Can I get out the purchasing a home agreement contract now? Will I facing any legal problem?
2. Will I loose my deposit $10000?
3. Beside the deposit money, will I facing more loosing legal money for penalty?

Please can any one give some answers?

Thank you.

Mary

Help the community by answering this question:

Answers

8
Diana Margala (909) 560-0145’s answer
Hi Mary:

This is a very difficult position for you, the answer lies in your contract. If you have not removed your contingencies you should be able to back out and get your good faith deposit. If your contingencies have been removed then there could be a problem. You might want to talk to your lender and see if you qualify for a grant, which might allow you to continue to purchases your home. Talk to your agent they should be able to help you, if not you can talk to your agent's broker.

When I am working with buyers I always tell them to have the gift money transferred into there account because sometimes this happens and if it is already transferred then usually it does not become an issue. It also makes you a stronger buyer. Unfortunately things happen and situations change and the gifts many times are no longer available. I also remind them to make sure they talk to their lender so that they have the proper paper work available for the lender to secure the proper paper trail.

Good Luck!
Diana 909-560-0145
Web Reference: http://www.dianam.com
0 votes Thank Flag Link Tue Feb 22, 2011
Mary:

OUCH! That must hurt. Please clarify, since if I am reading this correctly, you are purchasing a new construction home. Is that right? Also, now is the appropriate time to speak with an attorney, as what you are requesting is legal advice. I am not an attorney, so I can only offer you my opinion and experience. Only an attorney can answer the question "Will I be facing any legal problem?"

My concern is that if you are buying new construction, then you probably did not sign the CAR (California Association of Realtors) form that most of the other agents are referring to. You would have signed a builder's contract to purchase and the allowed reasons for backing out of the purchase and getting your deposit refunded will be spelled out in that contract. Most developers will work with you, especially seeing as it has only been two weeks. However, the contracts they have you sign are there to protect their interest (the builder/seller) and not your interest (the buyer).

If you are respresented by an agent, have them review the contract with you right away and make the proper notice to the seller. If you are not represented by an agent (as if often the case in new construction purchases) you may need to have an attorney look over the documents. In either case, giving notice of cancellation sooner rather than later may, at least, mitigate your liability. If you need a referral to a good real estate contract lawyer let me know. Good luck in unraveling this transaction.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
myrealestateanswers@gmail.com
http://shel-lee.listingbook.com
0 votes Thank Flag Link Tue Feb 22, 2011
Hi Mary,
If it has only been 14 or 15 days and you did not change the contract to shorten the time frames; you may be able to get your money back. It depends on what the contract says. Just not being able to get your loan may not be enough as our friend in New York states. It used to be that way! But now our new contracts state that obtaining of down payment funds is not a contingency. However obtaining the loan is, til day 17 usually. That is a gray area as to why you don't get your loan. You should talk to your agent and see what contingencies you can use to cancel at this point. But do this right now today! You are on your last couple of days. Check all your time frames and reasons, there are many. Unless you have removed your contingencies you may very well find something.
Sorry this happened to you and best of luck,
Connie Bramble
Prudential CA Realty
714-337-8718
#898302
0 votes Thank Flag Link Tue Feb 22, 2011
Hello Mary,
please openly talk about the situation with your agent and your lender.
They both are fully aware what a loan contingency that is place as a part of your contract means.
They will advise you on when the loan contingency is removed - do you remember to be removing contingencies in writing? Was your offer presented with the information that the down payment will be gifted to you? All the details are important and your agent knows how the offer was written and presented.
Whish you best of luck with solving the problem,

Teresa
0 votes Thank Flag Link Tue Feb 22, 2011
Your agent can best advise you, much will depend on your contract-- if you don't have an agent consider consulting with an attorney who specializes in real estate and have all related documentation reviwed and go from there.
0 votes Thank Flag Link Tue Feb 22, 2011
Hi Mary,
If you just opened escrow and you are within the 17 day contingency period, you should not have any problems. Please notify your agent ASAP that your financing is no longer available and have them cancel the escrow and the contract. The sooner you let them know, the sooner the seller can put the home back on the market and move forward. He cannot close escrow on his home until this one is canceled, so do it today.

Your deposit is always at risk, but in my experience, most sellers are reasonable and do not try to keep the deposit in situations like this. Just be honest with everyone so that they know why you are backing out.

Good luck.
Web Reference: http://www.aaronzapata.com
0 votes Thank Flag Link Tue Feb 22, 2011
This should be a question for your agent. If you have not removed your contingencies in writing, then you should be able to cancel escrow and get your deposit back without penalty unless you agreed to cover any costs incurred by the Seller.

I'm sorry your parents did that. You may be able to find a less expensive home to purchase without their help. Good luck.
0 votes Thank Flag Link Tue Feb 22, 2011
Hello Mary, Sorry to hear about this. Seems to me if you did not get the gift(condition) that you will not qualify to purchase. If you have a Mortgage Contingency and your Mortgage Broker writes a letter it should get you back your escrow monies. I am speaking only about New York but safe to say it should be true for you as well. Best of Luck Allan
0 votes Thank Flag Link Tue Feb 22, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer