Home Buying in 02630>Question Details

Virginia Far…, Home Buyer in Barnstable, MA

we signed a purchase and sales agreement and our loan fell thru the contract stated buyers option to revoke

Asked by Virginia Farnum, Barnstable, MA Sun Jan 18, 2009

the offer or terminate the contract if a mortage or loan commitment cannot be obtained are we entitled to our down payment back

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11
Peggy Gabour’s answer
You need to read the purchase & sale agreement that you signed - it should state in there what you are entitled to should buyer not be able to secure a mortgage. Speak with your agent and attorney. You do need to notify the sellers IN WRITING with copies of the mortgage companies statement of refusal.
1 vote Thank Flag Link Sun Jan 18, 2009
It will state the details in the purchase and sale, but yes, as long as you submitted your application by the date in the mortgage contingency and received notification of a rejected mortgage commitment on or before the commitment date listed in the commitment, your deposit should be protected. Definitely contact your real estate attorney.
Web Reference: http://www.territory.com
0 votes Thank Flag Link Sun Sep 11, 2011
Your Realtor should be helping you with this, but anyway you should also read the contract carefully before you sign the contract and now again to learn what to do in this situation. As long as you comply with the time allowed to apply for the loan, and inform the seller IN WRITING within the cancellation time for the loan contingency, you should get back your escrow down payment deposit. Who is holding the down payment money? What does the contract say? Do you have a "contingency" for the loan written into the contract? Who is assisting you with this transaction? You need to follow the contract guidelines carefully ASAP to assure that your down payment is returned. Remember that a phone call does not qualify. All notices must be in writing. You should include a Rejection Letter from the bank if you can do so within the time frame. This is one of the many many reasons that home buyers should work with a professional Realtor to assist them. Good luck.
0 votes Thank Flag Link Thu Sep 8, 2011
Your Realtor should be helping you with this, but anyway you should also read the contract carefully before you sign the contract and now again to learn what to do in this situation. As long as you comply with the time allowed to apply for the loan, and inform the seller IN WRITING within the cancellation time for the loan contingency, you should get back your escrow down payment deposit. Who is holding the down payment money? What does the contract say? Do you have a "contingency" for the loan written into the contract? Who is assisting you with this transaction? You need to follow the contract guidelines carefully ASAP to assure that your down payment is returned. Remember that a phone call does not qualify. All notices must be in writing. You should include a Rejection Letter from the bank if you can do so within the time frame. This is one of the many many reasons that home buyers should work with a professional Realtor to assist them. Good luck.
0 votes Thank Flag Link Thu Sep 8, 2011
If your purchase and sale agreement states that you have a mortgage contingency then you should be able to get a refund of your deposit as long as your within the dates of the contingency.
0 votes Thank Flag Link Thu Sep 8, 2011
The good faith deposit should be returned if you fulfilled your side of the agreement. The thing to remember is that just like the contract the return of the money requires a bi-lateral action. The seller and the buyer need to agree on the disbursement of the funds.
If there is any disagreement the escrow company will not release it to either party. So if the seller says you shouldn't get the deposit back and you say you should, no one gets it till there is agreement.
0 votes Thank Flag Link Sat Jan 9, 2010
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Hello Virginia- I see this link is almost a year old. If you still are having trouble getting a new mortgage closed, please feel free to contact me anytime. Thanks, and good luck,

Ken L.
0 votes Thank Flag Link Sat Jan 9, 2010
Your agent/broker and/or attorney should be able to send a release/return of deposit to the listing agent/broker or seller for return of your deposit. You'll want to make sure you document everything and notify the seller/broker/attorney in a timely fashion there are usually terms written into purchase and sales contracts that address this situation and exactly what to do.

Hope that helps
Web Reference: http://www.MedfordHouse.com
0 votes Thank Flag Link Thu Jan 7, 2010
ABSOLUTELY if you met dates and communicated with a paper trail. Check out me website http://www.JeanSOLMyHouse.com for your RE needs.
0 votes Thank Flag Link Sat Jun 6, 2009
Virginia,

Since I am not licensed in your home state of MA, this really is a question for your buyer's agent or an attorney. However, the contingency you described sounds similar to a financing contingency that we use in our purchase and sale agreements in Georgia. Read your agreement closely to ensure that you are within the time limit for making notification to terminate your agreement (which typically must be in writing). With respect to disposition earnest money and/or down payment money, again check with your agent or a real estate attorney. Usually, there are provisions in the contract that define who is holding this money and how this money is dispersed. The holder of the money will most likely need to follow a specific procedure to notify the parties before your earnest money or down payment can be refunded. In some cases, all or part of the earnest money or down payment may not be refundable. Consult with your buyer's agent or a real estate attorney. Best wishes - Ted
0 votes Thank Flag Link Sun Jan 18, 2009
TED SHOOP, Real Estate Pro in Buford, GA
MVP'08
Contact
Whether you are entitled to a refund of your escrow payment depends on timing and actions adhering to the contract language. What time frame was allowed for you to obtain the mortgage? Typically, this is 5 days to apply and a total of 30 days for loan committment. Then you must also inform the owners in writing that the mortgage was rejected. Did you meet this time frame? Even if you knew in time, you would still have had to inform the owners in writing. Read the contract carefully to be sure that you followed the guidelines.
0 votes Thank Flag Link Sun Jan 18, 2009
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