If you have an FHA Pre approval and the loan terms change...does the buyer get good faith money and options money back? What are the buyers rights?

Asked by Confused Buyer, Orange County Great Park, Irvine, CA Tue Dec 7, 2010

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Karen Parsons…, Agent, Laguna Beach, CA
Wed Dec 15, 2010

What does your agent say? If you have not removed the loan contingency, then you are probably protected for your good faith deposit. Most likely the option money has not been protected...but again, talk to your agent about the contract you actually wrote and the terms.

I hope it works out for you,

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Agnes Lago, Agent, Mission Viejo, CA
Wed Dec 8, 2010
It depends on
1. On how your contract is written
2. IF you performed or withdrew or disclosed and renegotiated within the allowed timeframe
3. Your agent should have a legal hotline access if he/she is an active Realtor (the Realtor designation matters!).. the question is did he/she protect you and your rights?

If you need better help in your next deal let me know. I always educate my clients and advice thjem proactively of their rights.
Agnes - Shore Capital & Vista Paciifc Realty.. MBA, Realtor since 1991
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Paul McIntyre, Mortgage Broker Or Lender, Huntington Beach, CA
Wed Dec 8, 2010
This will depend on several factors but the most important to you it appears is getting your money back which in short would be yes (caveat on "options money") as I don't know what is stipulated in your options agreement.
In general most professionals are NOT out trying to do hard and are not interested in you being upset, frustrated or willing to case a problem for them. When pressure is applied you will very likely get any funds back as long as you have not waived all your contingencies and even if you have in most cases, this is something that can be discussed.
If on the other hand you have chosen to "float" your rate hoping to improve upon your circumstances (accepting market risk of fluctuation) and have waived your contingencies for the seller and have now been bitten by the sharp reversal higher in rates over the past week, you may not get sympathy from the seller.
These are speculations on my part and I hope it provided you with more clarity.
Should you need more specific help I'm happy to reply.
Yours to count on,
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Satar Naghsh…, Agent, Irvine, CA
Tue Dec 7, 2010
good faith money you will get back if you are within the loan contingency on the purchase contract. In our area, it's 17 days by default on a Realtor form unless changed by one of the agents on the purchase contract.

Option money, you will not get back. However, option money is used on a purchase option or a lease purchase option contract.

Please let me know if you have any further questions.
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Alicia Mendo…, Agent, Fullerton, CA
Tue Dec 7, 2010
It sounds like you have a very specific scenario going on. The buyer's rights will depend on whether you are under a binding contract to purchase already, where you are in the process, and the terms that have been agreed upon. Please email or call if you need more specific help, or refer to your real estate agent (if you have one already) to further assist you.

Thanks and take care.
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Kathy Gutier…, Agent, Dana Point, CA
Tue Dec 7, 2010
This is a good question, and the answer can go a few different ways. First off, if things change with your financing to the point that you need to back out of the transaction, you are generally eligible to receive most or all of your good faith deposit money back if you cancel during the contingency period, which is customarily the first 17 days of the escrow. However, if your loan has not been fully approved by the time you need to remove your contingencies and you do so without the assurance that your lender can commit to closing the loan, then you could run into trouble. All of the terms of the buyer's rights as it relates to your good faith deposit should be spelled out in the first two pages of the Residential Purchase Agreement form (your offer).
Another option you can always consider if the requirements for your FHA loan change, is that you may still want to complete the transaction. It will depend on the specifics of your situation. Talk to your agent and mortgage professional about these issues, as they should be knowledgable about what your rights are as it relates to this. Good luck!
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