Your contract defines what the buyer's obligations are; if, for example, you have both agreed that the sale was contingent on their getting a conventional loan with 20% down, and they can't get that loan, that's the end of the story - whether or not they could pay cash or rustle up other financing.
Price and terms. Terms are an essential part of the sales contract. If they can't buy on the terms you agreed upon, I think you may not have a claim for the EM.
What does your agent think?
The contingency for financing is most important for the closing of your property. It is in place on your sales agreement as a safeguard for the buyer. If the buyer cannot get a mortgage committment, then they cannot be forced to purchase your home. They would however need to produce a mortgage committment denial letter to you/or your agent/lawyer. I practice real estate in NJ, so your laws may be different there...you should also have had a mortgage committment date on your sales agreement- the date of which the mortgage banker promised the funds (it is usually 30 days +/- from your closing date). If there was a problem with financing, you would be informed in writing. If your buyer is denied for a mortgage (in writing) then you cannot hold their escrow monies. If they don't have a written denial letter, then you may have probable cause. In any case, might be best to seek legal advice.
Northfield, NJ 08225
Carefully check the wording in your contract regarding obtaining financing. Each state has different verbage. You may want to consult your attorney to see if you have any recourse.
Good luck with your closing.
Carol Moson, CRS, ABR, e-Pro, SRS, SFR, EAH, GREEN, REALTORÂ®
"The Moson Group"
RE/MAX Greater Atlanta
770-973-9700 ext 289
Did you use an RPA-11?
has your contingency period ended?
did they release their financing contingency?
where is your agent?
Bottom line is; even if you "deserve" the deposit - California courts side with the Buyers most of the times.
It'll probably take more time and energy to collect the deposit than it's worth.
What are we talking about $25 - $30K. Do you have any idea how quickly an attorney can suck that out of your pockets?
Move on. Get a buyer that wants and loves your place because often times if you "make" people do things they are more inclined to be dis-satisfied down the road. You as the Seller are on the hook for anything the Buyer is unhappy with later on .
Lastly, a smokin agent would have already positioned the buyers agent to release the contingency or having them go non-refundable when the financing started to get shaky.
Hope you have a smokin agent!
Good luck to you!
Rebekah Owen, MBA
Skype Me at:Rebekah_o
There are many reasons the lender may not approve a loan.
The seller and buyer both need authorize the release of buyer's earnest money from the escrow company. Your agent will know how to proceed.
It may be better to cancel the contract and get back into the game so you can get a new buyer and a new contract. Time is money.
Lois Harper Coldwell Banker Wardley, Las Vegas, NV - 702-612-8842
YES this happens MORE TIMES THAN you can imagine up to last second lenders can pull the plug !
All is governed by terms and conditions of executed sales agreement have your listing agent explain the contract . Title company would require a release of earnest money from all parties including brokers.
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
I can say that the lenders are making up rules as they go along and good for the selling agent in protecting the clientâ€™s earnest money by not removing the contingency. Sellers donâ€™t seem to understand the problems we are seeing in the transactions. Mortgage brokers can tell stories of demands and weird rulings from underwrites that can bollocks up a deal right at the end.
One work around is to have the buyer double app. Have them fill out loan applications with a lender of your choosing. Be up front with the lenders, but this is one way to close the deal on time.
If your agent and his/her broker cannot get a letter from the buyers lender, then prior to getting an attorney, you need to ask yourself if you want to spend time and money chasing this further, or is it time to move forward.
I know it's the principal, that you sold your home in good faith and from your letter, I can feel your frustration, but be careful what you ask for, the attorney fees can get very expensive.
It sounds like the buyer had a loan and appraisal contingency in the contract. If these contengencies were removed, as referenced already, talking with a Real Estate Attorney would be a good idea to see what the best path would be for you.
If these contingencies were not removed, then contractualy, the buyers are within their rights to back out of the contract. These contingencies are in place to ensure if there is a problem with the appraisal or loan that that there are options of either further negotiating based on the appraised value or allowing the buyer to release themselves fromt he contract if they are not able to get financing.
If you feel that the buyers are not being truthful with you, first I would talk with the agent who is representing you in the sale of your home to see if they might be able to get some insight from the agent representing the buyers. Secondly I would make sure to know the details of the contract. If the loan contingency has not been removed, it is typically harder to prove your case. If contingencies were removed, you may have a contractual ability to recoup the earnest deposit money.
It is highly recommended you talk with your Realtor and a Real Estate Attorney to discuss the details of your contract so you fully understand the contractual obligations the buyers have so you better know how to proceed.
Sorry to hear that this has been a frustrating process and I hope that the next buyers you work with are better equipped to close.
I hope this helps!
Alain Pinel Realtors
This is my opinion,
RE/MAX of Valencia
Sandi Siron, Principal Broker
ERA Universal Realty, 985 Hermiston, OR
Office 541 567-8303 Mobile 541 571-1221
Yes, you are entitled to a refusal letter from your buyer's mortgage company. The letter would be sent to your listing agent (ask him/her for a copy). The letter from the buyer's mortgage company should state why the buyer has been denied a mortgage. It is a form letter (in most cases) with check boxes, but it is very apparent why the buyer has been denied.
If you don't get this, then as I suggested before...seek legal councel.
Good luck, SF is my favorite city ever ...I grew up in SoCal
Seems to me that you have the right to ask for a copy of the lender's refusal to give financing.
The lender may have countered the buyers on the financing they may offer the buyers, or they may have denied them credit all together. The buyers contract obviously had a financing provision in it if they have a contingency. What are the terms within the contract? These are maximums the buyers will accept for financing, so the letter from the lender with the denial (or offer) of credit would have to be above the contract limits. There are lots of issues getting financing right now, so anything could have happened. Be sure to get it in writing and work with your agent and their broker to get the best advise.
You would have to prove that they are trying to back out for some other reason in order to be entitled to the earnest money.