Yet, if you can avoid the cancellation, try, if possible, to work it out. Sometimes another lender steps in and saves the day for everyone. Good luck!
It might just be that the Buyer is still willing/working to move forward but can't secure their financing committment from the Lender until after the 3rd Party Addendum Date has passed. In this case, the earnest money is still 'hard' and Buyer still intends to close. I don't believe you'd want to cancel if this was the scenario.
If you 'know' that the Buyer is not going to close then you can use various tactics to terminate the contract early by maybe giving a partial release of earnest money and keeping the rest. Otherwise, your stuck with your current Buyer until your agreed to settlement date.
Maker Capital Group, LLC
Essentially the borrower will have a given amount of days to obtain financing. This date is listed at the top of your contract and is a number of days starting with the date of execution of your purchase contract. Once that date has passed if they buyer cannot obtain financing you will in most cases be able to keep the earnest monies and cancel the purchase contract. If the buyer tells you of this problem before the date on the Third Party Financing Addendum than they can in most cases cancel the purchase contract and get their earnest money back.
If you are past this date and there is no hope of the buyer being able to obtain financing then the best thing to do would be to cancel the purchase contract and re-list the home. What you should do next is get the facts from your Agent and the buyer's agent to find out if this deal can happen or not.
Best of luck to you.
REALTOR | Mortgage Broker | Consultant
Keller Williams Realty | 360 Lending Group
I am confused by your question and the answers given. Do you know for a fact that the buyer can't get financing or are you just have a moment of panic thinking "what if"? It seems like the answers given are assuming that the buyer can't get financing for sure and you are wondering what to do. However, I didn't read that in any of your comments (maybe I missed it), so I am confused. If you are just having a moment of last minute panic, you are not alone. :) I haven't met a seller yet that didn't have a moment (or several moments) wondering and worrying about things like this. So hang in there! If you have Realtors involved, talk with them and express your concerns. We've been through it many times and we can explain the process. Sometimes just having the information about how it all works, what to expect, etc. is enough to help with the fears. I hope it all works out for you!! Good luck!!
Separately, I suggest getting in touch with buyer/buyer's agent and presenting the option Brian mentioned in his 3rd paragraph. If the buyer can't get financing, no need to hold up the sales process by preventing you from getting it back on the market. Now, if they can close it's worth waiting an extra couple of weeks.
If they go past that date, they cannot use that as an excuse to get their earnest money back. If the deal falls through because of lack of financing, then they forfeit their earnest money (to you as the seller). Where you have the leverage is if they request an extension of the contract in order to obtain financing. You can either allow them to extend and hopefully sell your home to them, or you can deny their amendment and they will have to either close on that day (unlikely) or they will have to cancel the contract or be in default, which in either case you get the earnest money.
If you really don't think they will be able to get financing and want to get your home back on the market, as an alternative if the 3rd party financing date has passed, you can give them the option of pulling out now and get their earnest money back.
Hope this helps. You should also be able to ask your listing agent these questions.
It's more than real estate. It's RAYL-Estate!
Brian Rayl, REALTORÂ®, e-PRO, SFR
Keller Williams Elite - Dallas
Hope that helps.