Home Buying in Chicago>Question Details

homeforsale1, Home Buyer in Springfield, IL

What is my liability for backing out of this deal?

Asked by homeforsale1, Springfield, IL Thu Mar 21, 2013

I was approved for a home loan and was scheduled to close tomorrow. My contingency expired last week and I was approved then. Something came up and the lender suspended my loan today and I am unable to close. What would I be liable for if this deal does not go through?

Help the community by answering this question:

Answers

21
Philip Sencer’s answer
This is clearly a legal question to ask your attorney. No one one this site knows how the contract was written or the communication between your attorney and the other attorney. Normally, if you cannot get your loan, which is USUALLY always a contingency on a contract, you are off the hook, but you have not given all the info needed to determione that. Contact your attorney!!!
1 vote Thank Flag Link Thu Mar 21, 2013
The answer is in the purchase contract. Hopefully there was a contingency on you obtaining financing and since this contingency was not met, you can be released from contract without penalty. I don’t believe you should lose your earnest money because you were pre-approved and were negotiating in good faith.
0 votes Thank Flag Link Tue Mar 26, 2013
Legal question to ask your attorney but you are cover
0 votes Thank Flag Link Sun Mar 24, 2013
If genuinely had your financing denied (and aren't using this forum as a way to justify you breaching a contract), I'd recommend pie. Pie goes a long way. Bake a pie for the seller, and his agent, and maybe the attorney too. Enclose in the natural fiber box encasing the pie, all related paperwork showing why you were denied the loan.

With some luck, the seller will allow you time to try to get a loan through somebody else, or possibly even consider attempting to finance the property for you (for a limited time until you agree to a refinance).

If the pie doesn't work, and it is America, and it should, well, hopefully you didn't leave a lot of earnest money in holding.
0 votes Thank Flag Link Fri Mar 22, 2013
I hope you are working with a real estate attorney in Illinois, he or she will be able based on the terms of the sales contract and the reasons and latest information from the lender to determine what your legal
options are..... also is there a chance to change the closing date and for the lender to still consider giving
you the loan under different terms ???? It is essential for you to have an attorney look over the sales contract terms, and get the attorney's advice on how to proceed in your very best interest,

It is impossible for us here and as Realtors to give you legal advice, contact immediately your
attorney... The something cam up part of your description is obviously an important part, so make sure
that your attorney has all the facts besides copy of the contract and the response and reasons of the
lender/bank.

Good Luck to you

Sincerely yours,
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and
Investors alike....And always with a SMILE :)

Covering for @Properties Chicago & suburbs, and with her trusted Partner
Agents US & world wide properties. French, German, some Spanish &more EdithSellsHomes@atproperties.com or EdithSellsHomes@gmail.com
Check out my website at http://tinyurl.com/YourRealtor4Life
Get to know me! Learn about my experience, expertise, services! Read letters
of recommendation! Sign up to search for properties in my expanded service area.
HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Fri Mar 22, 2013
I have had this happen but the lender and my client developed a timeline to complete the process and close the loan at a later date. The seller agreed. If the loan is denied completely, then legal action by the seller may be taken. You must consult with your attorney immediately!! Good luck.
0 votes Thank Flag Link Fri Mar 22, 2013
Dear Home Buyer,

You may end of formfitting your earnest monies. Remember I said "may". You should be working very closely with your attorney at this point. It is his/her job to guide you and negotiate on your behalf. By you saying your loan is suspended do you mean it will not go through at all?

Best of luck to you.
0 votes Thank Flag Link Fri Mar 22, 2013
You could lose your deposit and they can sue for damages at worst. Your agent should be guiding you through this. You need to ask your loan office rif there is a fix for your problem, how long it will take and get an extension fo rthat time. good luck working things out
0 votes Thank Flag Link Fri Mar 22, 2013
You will likely lose your earnest money- although depending on your circumstance, there are sympathic sellers out there- if the home sold quickly, they may be able to sell again without losing any time. Good Luck~
0 votes Thank Flag Link Fri Mar 22, 2013
Have your attorney try to find the best outcome for you. You may be able to get out of this with no loss of Earnest Money if sellers accept the reason as to why your loan was suspended.
0 votes Thank Flag Link Thu Mar 21, 2013
you will be liable for your earnest money plus I would suspect..
0 votes Thank Flag Link Thu Mar 21, 2013
Hello,

Your attorney should be advising you on this.

How did this happen? I had a previous experience with a buyer client where the loan at the last minute was denied, there were no penalties at the time but it really depends on the circumstances.

Good luck!
0 votes Thank Flag Link Thu Mar 21, 2013
sounds like you should ask your attorney about this you do have have an attorney don't you
0 votes Thank Flag Link Thu Mar 21, 2013
Your purchase contract should detail all liabilities.

Chris
0 votes Thank Flag Link Thu Mar 21, 2013
You need an attorney to be involved asap. Yes, you may find yourself with some liability related to the inability for the sale to close if all the contingencies were met and the funding is now not available to you.
The "something" that came up is going to be a big part of determining this.
0 votes Thank Flag Link Thu Mar 21, 2013
If your loan got a clear to close, how did they take it away?

I would be on the phone with my attorney asap.
0 votes Thank Flag Link Thu Mar 21, 2013
Hello,

You need to speak with your attorney immediately. This is purely a legal matter but hopefully your attorney has you covered.

Best of luck.

Ian Halpin / Broker
Jameson Sotheby’s International Realty
425 W. North Ave. / Chicago, IL 60610
O: 312.335.3220 / F: 312.229.9190 / C: 773.531.4479
ihalpin@jamesonsir.com | http://www.jamesonsir.com
0 votes Thank Flag Link Thu Mar 21, 2013
You can loose your earnest money.
Seller also has ability to sue you to perform.
The best person to figure out your liability is your attorney.
0 votes Thank Flag Link Thu Mar 21, 2013
You can loose your earnest money.
Also seller has ability to sue for performance.
Helen Mandel
(312)218-4888
0 votes Thank Flag Link Thu Mar 21, 2013
Your agent has to answer that question as it is state and eal specific. Most States have a financing contingency so it may be that you can cancel as your lender won't go forward. Talk to your Realtor, they will know.
0 votes Thank Flag Link Thu Mar 21, 2013
Did your agent mark the box that says "loan contingency shall remain in effect until designated loans are funded" ? On California contracts we have this item. If your contract has this on it you may be able to cancel and still retain your deposit.......
0 votes Thank Flag Link Thu Mar 21, 2013
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