Home Buying in 08852>Question Details

Jaz, Home Buyer in New Jersey

If a buyer has made two deposits on a offer, one for $1000 as earnest deposit and the second for $15,000 upon

Asked by Jaz, New Jersey Mon Aug 25, 2008

attorney review but is not able to get a mortgage commitment from the lender by the mortgage commitment date or if the property doesn't get appraised to or above the agreed sale price? Does the buyer lose all the deposit money or can the seller take any legal action against the buyer?

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Answers

5
Although we are not attorneys... this is how I understand it, I could be wrong.. again as i am not an attorney and I am not giving legal advice or counseling. :)

As I understand it a contract is contingent on two things, a satisfactory inspection of the property and any and all issues are addressed, repaired and the mortgage contingency. If either are not addressed the buyer can get out of the contract and monies returned. This also depends on how these items were addressed by the attorney during attorney review.

I could be wrong, as I am not an attorney. You should speak to your attorney in detail to understand how this works.
0 votes Thank Flag Link Tue Oct 7, 2008
Please consult your attorney. In most cases the deposits are returned to the potential buyer under a standard New Jersey sales contract if a commitment cannot be obtained, unless other conditions were agreed upon by both buyer and seller.

Also, in extreme circumstances, a seller might want a potential buyer to go through an approval process with a more reputable mortgage company. Sometimes, if the seller's real estate agent works for a brokerage that is also affiliated with a mortgage company, the seller might suggest that the buyer go through a second approval process to make sure the buyer isn't trying to pull out of the deal without a legitamite excuse.

Returning a deposit is using black and white on a contract, but make sure your attorney is involved with the process and is able to verify that you can get your deposits back without any problems. Contracts are simple, but can be interpreted differently by different people.

Good luck.

Carmelo Torres
A Home For Sale Realty
ctorres@ahfsr.com
Web Reference: http://ctorres.ahfsr.com
0 votes Thank Flag Link Wed Aug 27, 2008
Jaz:
Typically, using the NJAR standard contract, the deposit goes back to the buyer. Special terms that may have been inserted or the use of an attorney-draft contract may have a different outcome. If you have no mortgage commitment, you essentially have no deal. The seller would be wise to return your deposit so he/she can move forward to find a qualified buyer.
0 votes Thank Flag Link Mon Aug 25, 2008
Dear Jaz,
This is a question for your real estate attorney, not for an agent. We are not attorneys and we can't answer legal questions. Speak to your attorney and they can review the provisions of the contract with you.
Good Luck,
Sharon Kozinn
Web Reference: http://sharonkozinn.com
0 votes Thank Flag Link Mon Aug 25, 2008
It depends on how the contract was written... If the buyer can not secure a loan during the time frame and the financing contingency states the buyer can opt out due to the loan not being satisfied... then the buyer will get the money back. Now for the appraisal, same situation; if the contract was written with an appraisal contingency or if there are special stipulations stating the home must appraise at or above sales price then the buyer gets the money back. If the contract is written correctly the seller does not have any legal recourse to go after the buyer. The contract should state these facts clearly for both the seller and the buyer. Bottom line is the buyer did not default on the purchase and sales agreement if the contract was done properly.
0 votes Thank Flag Link Mon Aug 25, 2008
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