Mortgage took longer than the closing date and the sellers decided to terminate the contract, Earnest Money?
Liz asked:
I applied for a mortgage loan to buy a house, closing date was schuduled for July 3, 2007 but finance company was not ready to close and took longer than expected, so sellers terminated to contract. Everything was okay on my part, I turned in every document that was asked for and inspection passed. Sellers want to keep the Earnest Money, what should I do?
BRETT
I applied for a mortgage loan to buy a house, closing date was schuduled for July 3, 2007 but finance company was not ready to close and took longer than expected, so sellers terminated to contract. Everything was okay on my part, I turned in every document that was asked for and inspection passed. Sellers want to keep the Earnest Money, what should I do?
BRETT
If you want edit me? just go to your profile than add description text as many you like. ^_*
JOAN
It is theirs as it is you that did not perform by not being able to obtain your loan within the agreed time.
1CLAUDE
Why didn’t you Realtor and/or broker ask for a closing date extension? The closing didn’t happen because delays on your part so they get to keep the earnest money. I feel for you but next time to have to little a fire under the mortgage co because it will sit on their desk, and I would find another Realtor (he or she should have be on top of things). You may be able to keep the earnest since th seller was the one to terminated the contract. Find a loop hole.
2MARLIN
You missed the deadline promised by you to the seller.
3However, you may have some recourse with the mortgage company, if you can prove they were negligent.
Talk to an attorney, if you can find one to take this on a contingency basis then you have a case. If attorney’s will not take it on that basis, then you might assume its cheaper to lose your earnest money
WALTER
usually in real estate closings not closing on the date provided is not a material breach of the contract allowing one party to cancel, unless it expressly stated time is of the essence or once the closing date passed issued a time of the essence where you usually have ten days to close? if they failed to follow your state procedure then they are in default
if they properly gave a time is of the essence, then might side with them
4ERICK
Your Realtor should have asked for an addendum to extend the contract.
Your situation is a classic in why you need to select a good lender, and I would bet lunch that you used an internet lender.
Unless there was a contingency regarding this, you have forfeited your earnest money by not completing the contract in a timely manner. Contact the seller’s principal broker and see if there is a way to get your money back, but it is unlikely.
5DWAYNE
If they have another buyer, you should still be able to get that earnest money back. If they don’t have another buyer, just get an extension. This happens all the time. Even if you missed this date, they need to be reasonable enough to know everything doesn’t go as planned in business. Most people are. I’ve done hundreds of transactions and have had this happen 5-10 times in my 15 years in the industry and not one time has a buyer kept the earnest money deposit because a loan didn’t fund before the time frame was up.
Contact your Realtor. Tell him or her that, if the seller has a new buyer in contract, they need to give your money back to you or you’ll start contacting local new agencies. If it is not in contract, extend the contract and buy it. I’ve had to battle to get earnest money back before, but I’ve always got it for my clients. You’ll get the money back if you make enough stink about it.
If all else fails, there has to be a clause that states, if your financing is not approved, you can get out of the contract. This clause is extremely effective. If they want to be difficult, just call your lender and get a denial letter, provide that to the selling Realtor, and they’ll have to give your money back.
Good luck.
6