I have a question about a home being built and now I am not able to obtain financing.

Asked by John Kagey, Stephens City, VA Tue Sep 30, 2008

May 11th 2008 I put a contract for a new Ryland Home. I signed a Sales Agreement and gave them $2000. On the Sales Agreement it stated I had 3 days to change my mind, 7 Days to apply for financing and 30 days to obtain financing through an approved lender.

Well I applied with Ryland Mortgage. It is now Sept. 30 and I still do not have approval from them. I am less than 30 days from closing and they are about 2 weeks from finishing the house. I still do NOT have financing. I applied with Ryland Mortgage for a VA Loan, the issue unbeknown to me is that my current home was already a VA loan. Ryland didn't catch this until about 2 weeks ago. Now they want me to refi my current home into a FHA, well I have been denied that FHA Refi loan. I have had my house on the market since May. No contingencies on the sale of the home. Received an email from Ryland saying they could pursue all loses. Why would they break ground with out a commitment from the lender? Lawyer in process.

Help the community by answering this question:

+ web reference
Web reference:

Answers

7
Cindy Jones, Agent, Alexandira, VA
Fri Nov 14, 2008
Glad to hear you had a positive outcome!
Web Reference:  http://cindyjoneshomes.com
0 votes
John Kagey, Home Buyer, Stephens City, VA
Fri Nov 14, 2008
RYLAND HOMES came through. I received all of my earnest money and this was initiated totally by Ryland. I was presently surprised. Ryland as a whole was very good through this whole episode. My hats off to them. I wouldn't hesitate to do business with them again, but I would be watchful of the contract I sign. Thanks to everyone that has posted.
0 votes
Vicky Chrisn…, Agent, Purcellvile, VA
Thu Oct 16, 2008
Hootch - do you need a referral to a real estate attorney? If so, contact me 703-669-3142/ vchrisner@kw.com
Web Reference:  http://www.vickychrisner.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Sep 30, 2008
You should have had a buyer broker who could be guiding you through this, if you did you need to look to them for guidance, if not you need to review your contract. if teh 30 day contingincy for the mortgage isnt up get a denial letter, if it is up you should have given them a denial letter way back when. now you have to review your contract to see what if any outs you have and what you have given the builder and in what tome frame you gave the builder. you should ask teh builder for an extension, they do not really want to hold a home built for you and try to start over and sell it to someoen else. will teh builder buy your home or take it in trade? the builder usuall;y will not continue or start building until you get a loan approval. try and work with them, its your best bet.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Cindy Jones, Agent, Alexandira, VA
Tue Sep 30, 2008
You need to double check your financing contingency carefully. If they gave you 30 days to obtain financing and you have not been able to then it would seem that you may have an out. Your best bet is to do exactly what you are doing and speak with a real estate attorney who can carefully review your contract and all the events that have transpired since you signed the contract.
Web Reference:  http://varealestatetalk.com
0 votes
John Kagey, Home Buyer, Stephens City, VA
Tue Sep 30, 2008
thanks for the response, my understanding is that this was a non contingent contract. I don't have the buyers agreement directly in front of me, but when I looked at it, I don't remember seeing a financing contingent other than on the first page where it states I need mortgage approval within 30 days.

This isn't about buyers remorse and I would like to have the house, but they sure are pushing me in the corner. I understand their concern, I mean they have a 400k house getting ready to go on their inventory if I can't close this. I think I have exhausted my options, I can't refi out of the current VA, my house won't sell (I have dropped it 30k and am running out of equity) and I can't have 2 VA loans, now Ryland is understandingly very upset. Which is putting a lot of stress on me and my wife.

Is it common to start building before some sort of financing commitment is in place? I mean they moved along in good faith but in this market that is very dangerous. I just want to be able to get out of this unscathed. Meaning no litigation and if I get my $3000 back that would be great but that is not even concern of mine right now.

Thanks for the advice.
0 votes
Jeff Royce, Agent, Fairfax, VA
Tue Sep 30, 2008
The specifics of your contract are important here. If you have a buyer's agent...make sure they are looking closely at your contract. The first thing you need to check for is if you have a financing contingency, and if so, the process for activating that.
Web Reference:  http://www.ourfairfax.com
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more