Seller accepted my offer, but banks won't give me a loan. What are my obligations now. The offer/contract states that I've to make 8K initial deposit

Asked by risingdeepstar, 90024 Mon Oct 29, 2012

Could the seller or escrow agency come after me for damages? Could they ask for the 8K initial deposit within 3 days of seller acceptance?yahoo.co

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17
Sinead McAll…, Agent, Oceanside, CA
Mon Oct 29, 2012
BEST ANSWER
It all depends on how the contract was written. I would advise you to consult with your Realtor ASAP as time is of the essence!
Thanks!
Sinead McAllister
Broker
McAllister Homes Real Estate
858-205-5215
brokermcallister@gmail.com
http://www.McAllisterHomes.com
1 vote
Awesome! Best of Luck!
Flag Mon Oct 29, 2012
Thanks for your reply. I've a perfect credit, was willing to put 40% down and have sufficient income. But because I changed to from W2 to independent contractor (1099) in the past 8 months, I was denied conventional loans! I did contact my agent letting them know of my withdrawal. Thanks.
Flag Mon Oct 29, 2012
Jane Peters, Agent, Los Angeles, CA
Mon Oct 29, 2012
It sounds like you haven't entered escrow yet, or just entered escrow, since you are talking about the 3 days. If your money is not yet in escrow, then you can just cancel. Also, your money is not in jeopardy unless you removed your loan contingency. I am not sure how you are buying a property without pre-qualification from a lender. This is a perfect example of why buyers need to be pre-approved first.
Web Reference:  http://www.homejane.com
1 vote
I entered escrow and few hours later discovered that I can't get a conventional loan
Flag Mon Oct 29, 2012
Janey Bishop, Agent, Encino, CA
Mon Oct 29, 2012
If you didn't use a Buyer's Realtor please promise you will in the future. You might be able to find your own house but you need a professional to execute the transaction successfully while protecting your interests and your money!

If you didn't remove your contingencies then just be sure you or your representative notifies them in writing that you are cancelling.
1 vote
I had a professional agent. She knew about my finances which were perfect credit score, 20%+ down payment and good income. The surprise was that changing from W2 to 1099 ( just 8 months ago) disqualified me
Flag Mon Oct 29, 2012
Catherine Sc…, Agent, venice, CA
Tue May 5, 2015
Did your Realtor write any contingencies into your contract? Have you opened Escrow yet? Have you already made the deposit? If you have not wired the deposit or opened Escrow, you should be able to cancel the offer. If there are loan contingencies you can get out if they are in the contract. This is a question for your Buyers Agent as each deal is different.
0 votes
Gail Mercedes…, Agent, Beverly Hills, CA
Sat Jul 6, 2013
I am surprised that when offer was submitted the prospective buyer did not have valid pre-approval from bank and source of funds. Listing agent should have verified with bank mortgage pre-approval.In any case, there is a loan contingency in accepted offer and escrow instruction for buyer's loan approval. I am not an attorney but since buyer cannot satisfy loan approval contingency there should not be any damages that seller suffered. As state I am not a real estate attorney. Seller maybe willing to cancel ,refund deposit and move on. On the other hand, seller may feel they have suffered damages. I would check with real estate attorney for you legal options in this situation.

Gail Mercedes Cole
EXP Realty
310.853.9933
0 votes
Mia Shin, Agent, Los Angeles, CA
Fri Mar 29, 2013
You have a loan contingency and you have usually a time limit in which to get a loan, if your agent used a CAR form. if not, talk to a lawyer, but if you don't qualify for a loan, you have every right to back out, the seller cannot do a thing about it, as long as you are within your contingency period.
0 votes
Kathleen Bec…, Agent, Santa Monica, CA
Mon Nov 12, 2012
Did you actually put money into escrow? If not, then you do not have an officially open escrow. Most likely not. You can simply tell your agent that you want to back out of the offer, complete a withdrawal of offer form, and your agent should relay that to the listing agent and seller.

You may want to ask the advise of a real estate attorney to verify the offer.

Good luck!
0 votes
Medicineman2, Home Owner, North Bergen, NJ
Tue Oct 30, 2012
If your offer contains a mortgage contingency clause you have nothing to worry about. Your attorney can easily take care of this for you and that is your best route now.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Tue Oct 30, 2012
Dear Rising,

One of the reasons I work with Pre-Approved buyers ONLY is to avoid the situation you are talking about right here. Before we go out to look at any property, we have a letter from a reputable bank that has looked at all the buyer financials and determined that they can have a loan. We know exactly what the buyer can afford.
There are few suprizes when we go looking and the sellers love working with us because they are not having their time wasted. They buyers are happy because they can buy, in the price range we are looking in...It's a Win-Win for everyone!
To answer your question, you should have had a "financing contingency" in your contract which protects you. Please check your contract and speak to your buyer agent about your options.
0 votes
carlos parra…, Other Pro, Monrovia, CA
Mon Oct 29, 2012
Did you have a loan contingency? Hope so!
If you had no contingency, then you might be liable for the deposit!
Do you have an agent working with you? Doesn't sound like it otherwise he/she would have already advised you of this.
Good luck!
0 votes
Kawain Payne, Agent, Seal Beach, CA
Mon Oct 29, 2012
Hello,

The deposit is usually turned over the escrow within three days of offer acceptance.

If you are unable to obtain a loan, then you are in default of the purchase agreement.

Did you get pre approval? Why was your loan denied?

Depending on the timelines agreed to in your purchase agreement, you could loose your deposit.


Best of luck to you.
Kawain Payne, Realtor
0 votes
Ron Thomas, Agent, Fresno, CA
Mon Oct 29, 2012
it really sounds like you are doing this without a Realor.
0 votes
Brian Byhower, Agent, Hermosa Beach, CA
Mon Oct 29, 2012
What were you thinking? If the banks won't give you a loan, why did you write up an offer? Why would you put down a deposit on a property you can't buy, where's the logic there? Did your agent advise you to do it, hoping that you'd magically get a loan or win the lottery? Sounds to me that you need a new agent that can advise you better.
0 votes
Douglas Perez, Agent, Los Angeles, CA
Mon Oct 29, 2012
Hello risingdeepstar,
Read your contract's terms, conditions, and contingencies deadlines. Your agent should advise you better about your situation.

Good luck.
0 votes
Jeffrey Sand…, Agent, Los Angeles, CA
Mon Oct 29, 2012
It really depends on how your contract was written. If you used the standard California Residential Purchase Agreement and didnt alter the boiler plate contingencies you would have: 3 business days to get your deposit in escrow, 17 days for loan and inspection contingnecy. It is surprising that the listing agent didnt request a letter of pre-approval.

If your contingencies are active there shouldn't be an issue in cancelling, particularly if you havent sent your deposit in. Refer to your agent or real estate attorney regarding the specifics of your contract.
0 votes
Lynne Tucker, Agent, Potomac, MD
Mon Oct 29, 2012
Hopefully, your contract has a finance contingency that gives you the right to cancel the contract if you are unable to get a loan. Check with your Realtor or attorney. Good luck.
0 votes
Eric H. Wong , Agent, Albany, CA
Mon Oct 29, 2012
Do you still have a loan contingency? What are the terms of your contract? Have you spoken to your agent?

If you still have a loan contingency, you should be fine. Consult with your agent. This is an easy to answer question.
0 votes
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