Home Buying in 86442>Question Details

Jim4norm, Home Buyer in 86442

Here's my situation. I recently had an offer accepted and a P&S was signed. Under the contract we had until March 17th to come up with our

Asked by Jim4norm, 86442 Wed Mar 24, 2010

loan commitment letter. On March 9th, our mortgage company sent an appraisal to the home where the appraiser found out that 2 weeks prior a tree had gone through a back window and was still there. Never did the seller or his real estate broker contact us about this. But they said that their insurance was notified and would take care of it asap. Appraisal notifies mortgage company of this and loan was put on hold due to this issue. On March 17th, the date the commitment letter was due, we signed an addendum requesting an extension due to this situation. Sellers and broker refused to sign. On the 19th we received a denial letter and sent to sellers. They now want to keep the deposit of 3K. Can they do this?

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Candice A Donofrio’s answer
It all depends on the terms of the contract you signed.
If you've executed an AAR Residential Purchase Contract, look at Section 3F which is the escrow company's instructions in the event of a dispute over the earnest deposit. Talk to the escrow company's branch manager, who is authorized in their sole discretion to make the call when earnest money is disputed. Find out their opinion on the situation. Then you'll have a better idea how to proceed--and if you need a RE attorney.
1 vote Thank Flag Link Wed Mar 24, 2010
If you are using a standard contract for this area, you should have a financing contingency. If financing was denied and you did every thing you could to obtain your financing, you get your deposit back. Also, in our contracts there is a section that states the sellers responsibilities. One of those responsibilities is to maintain the home so it's condition at closing is at least as good as it was when you agreed to purchase it. Hopefully, your earnest money is being held in the title companies trust. They are the neutral third party and if you performed according to the conditions of your purchase agreement, your funds should be refunded to you. Just because the seller wants the deposit it doesn't mean they will get it. Good luck to you.
0 votes Thank Flag Link Sat Mar 27, 2010
I hope you had a financing contingency in your contract.
0 votes Thank Flag Link Thu Mar 25, 2010
The answer depends entirely on the purchase contract you signed. Assuming it was our most currently AAR purchase contract, you would have had to been issued a cure notice and 3 days opportunity to correct, before you would be in breach of the contract and have the earnest money forfeited.

You could also notify the seller that you choose not to continue with the purchase because you cannot obtain financing without conditions, the conditions being the tree damage. At this point they may decide to grant you the extension until the tree damage has been corrected plus a few days for the lender/ appraiser to confirm this. Once the damage has been repaired and the lending condition resolved, you will be able to proceed with the closing.

I hope the title company is one that you chose to use, because in the event of an earnest money dispute, they are the ones that decide who receives it.

You may want to have your agent talk with the seller's agent and/ or their broker to attempt to resolve this matter before it goes too far.

Please seek the advice of a real estate attorney before proceeding. Best of luck!
0 votes Thank Flag Link Thu Mar 25, 2010
HI Jim,

Nobody here knows the terms/conditions you agreed to, and as such, nobody here can advise you what to do other than to have this discussion with your Buyer's Agent that you hired to help you with that purchase or consult a real estate attorney to review your P & S agreement.

Exclusive Buyer's Agent
0 votes Thank Flag Link Thu Mar 25, 2010
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