There are often contingencies in the mortgage committment and those were not fulfilled or if something else came up, such as job change/loss, change in credit (which banks generally check again before closing), etc. that contingency could potentially be revoked.

I would suggest speaking to your attorney rather than the buyers attorney to see possible action you might be able to take.

I would think the buyers had a commitment we were set to close. Their lawyer talked to the bank and they were set to close.

Did the buyers have a mortgage committment from the bank? That document states the bank will loan the applicants the funds with or without conditions. If those conditions are met they should be clear to close unless one of them lost their job, credit report changed or something.

I would contact your attorney and get the details, and ask him/her about a time is of the essence letter if you are looking to sell it to someone else. It's good to keep showing the house and taking back-up offers if you are getting them so you can expedite your sale.

If you have any other questions, just let me know.

Cheers!
Cree

The buyers lawyer said that we will have closing date 24- 48 hrs. All the paper work was in at the bank.That was last Wednesday.
They now have said they can't get a FHA mortgage.

Hi Tina,

Speak to you attorney. Generally, if the buyer does not meet the dates of the contract closing, then your attorney would issue a time is of the essence (30 days). If they still don't perform you should be able to sell to another party, but again check with your attorney.

If have any questions, feel free to drop us a line at cree@barqua.com

Cheers!
Cree Quaker
845-679-1237

I do agree with Keith answer, somewhere somebody did not do their diligent duty to follow up with the dates and time frames in the contract I proceed with my buyers and or sellers just that way, if we get a few days close to the due date for the loan commitment letter we start calling the attorneys, the lenders and the other agent, we figure out what is going on and then the attorneys either extend the period (sometimes the lender requires a few more extra days for whatever reasons....) but in your case you seem so close to closing/????
Good luck ... did you discuss it with your attorney?
Edith
edithsellshomes@gmail.com

Tina
There should be timeframes (the contingency period) by which the buyer commits to buy. I would ask this question to my Realtor and/or attorney.
For example, in CA the buyer has 17 days to obtain financing and obtain loan approval. We keep track of the time frames and make sure that the buyer knows that on day 15, if things are not proceeding, they will receive a "request for buyer to perform" or else we may cancel the sale.

I would think that your team would have something like that in place. You say that you are two weeks late in closing, so IIMHO) it appears that someone is not on top of the situation. At least in my experience anyway.

Hello, Tina! Knowing why the buyer was denied financing is crucial. If it is due to a requirement specific to that lender, they may be able to obtain financing elsewhere and I agree that is usually the best way to go. If it seems they will not be able to obtain financing through another lender then logically, you would want to terminate the sales contract so that you could promptly put the your home back on the market. However, if the you and the buyer have not or do not mutually sign a cancellation of contract agreement, I would urge you to consult your attorney to ensure that you follow all of your legal requirements. Obviously, you only have 1 home to sell and you do not want to be legally obligated to sell to 2 people.

Best Regards,
Misty Turnbull

Hi Tina,
Ana's response covers it all pretty much. You need to sit down with your listing Agent and your real estate attorney who is very familiar with your contract to see what the terms are. There has to be a term in the contract by which the loan commitment letter from the lender is due, until then the buyers have time, if at that time they realize that they are going to be late because they have to try with another lender (the buyers' attorney should communicate that to your attorney and then communication with their new lender and his/her feedback combined with the terms of your contract regarding due date for the loan commitment from the lender will enable your attorney to either extend the loan commitment period on the contract, or execute the cancellation of the contract in writing based on the terms of your contract with the buyer.

Once your current contract has been canceled can you enter a new contract with a new buyer.
Take care and good luck to you!
Edith
edithsellshomes@gmail.com

Tina,
This situation is very common these days. First I would try to find out why your buyer was denied, and if they already applied with a different bank/lender you can call their mortgage consultant. Mortgage consultant will not be able to share buyer's personal information, but will most likely let you know if he/she is having difficulties or not, and how much time is needed to finalize the loan.
At this point you have two options, you can cancel the contract (check dates in your contract to make sure you have grounds for cancellation), or you may extend (in writing) the contract and give the buyers another week or two to finalize with 2nd bank. If your buyer is not putting any money down they are applying for an FHA loan, if the property appraised this should not be a problem. But might be one of the questions you need to ask their mortgage consultant.
This has to be your choice to either take a chance, or to withdraw from this transaction. If you are working with an attorney or real estate agent they will advise you on what to do, since it would be part of their responsibilities to communicate with the buyers and their bank. Also, they might be able to refer a good local mortgage company to help the buyer.
Good Luck!
Anna

My concern is that they did not put anything down and they are going to finance closing cost

W/out examinating the contract, I would think you could place the house back on the market. BUT would this be wise? If you were to put the house back up today, get a full price offer tomorrow, you would still be waiting 3 to 4 weeks for this new buyer to get financing. Most buyer's are having a hard time getting financing due to the banks are getting skittish (they are really tightening the screws on qualifying). You may want to counter back to the buyer and give them the 2 weeks, but add the phrase "time is of the essence". With that phrase, the times in the contract become the drop dead dates. If buyers cannot get financing by then, it's everyone out of the pool.
Good Luck!
Chip@chipshaw.com