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why should a builder have such right to kepp such money if the buyer can no longer pay a mortgage payemnt due to unpredictable/unforseen events. perhaps the builder should hurry up and build the home in 2 months instead of 7 !!
Home_Kid,
Like Karla explained (nice information post btw), you need to check the financing portion of the contract you signed. There is almost always a section that basically says if you cannot obtain financing the contract becomes voided and you get your earnest deposit back.
It sounds like this applies to you, but check the contract to make sure. Were you provided a Good Faith Estimate (GFE) from the lender before signing the contract? If so, it should state the mortgage terms (rate/length, etc) as well as all associated costs. If you no longer have a job then you probably won't qualify for a mortgage (what lender would loan money to someone with no job? - not a knock on you, just explaining)
But to go back to your original question, no, there is no FEDERAL law that obligates a seller to give you back your earnest deposit.
Like Karla explained (nice information post btw), you need to check the financing portion of the contract you signed. There is almost always a section that basically says if you cannot obtain financing the contract becomes voided and you get your earnest deposit back.
It sounds like this applies to you, but check the contract to make sure. Were you provided a Good Faith Estimate (GFE) from the lender before signing the contract? If so, it should state the mortgage terms (rate/length, etc) as well as all associated costs. If you no longer have a job then you probably won't qualify for a mortgage (what lender would loan money to someone with no job? - not a knock on you, just explaining)
But to go back to your original question, no, there is no FEDERAL law that obligates a seller to give you back your earnest deposit.
we checked the sales contract. they basically screwed us. the contract reads that after a lender's loan approval they [builder] can keep the earnest money even if i [buyer] can not secure a loan prior to closing.
we checked the sales contract. they basically screwed us. the contract reads that after a lender's loan approval they [builder] can keep the earnest money even if i [buyer] can not secure a loan prior to closing.
Very unfortunate to hear this..
If there is one thing the builder is good at it is covering their butts.. Just for situations like this.
I know hindsight is 20/20 but for anyone reading this please be sure to have a RE attorney read over a contract before you sign it.
Home_Kid, I'm curious, did you have a Realtor represent you in this process?
we checked the sales contract. they basically screwed us. the contract reads that after a lender's loan approval they [builder] can keep the earnest money even if i [buyer] can not secure a loan prior to closing.
maybe it is just me but I would have a attorney because that statement kinda of contradicts itself.
Right before closing the lender pulls another credit report and confirms everything if you have lost your job and have no income there is no way underwriting will sign off.
It is worth having someone look .
maybe it is just me but I would have a attorney because that statement kinda of contradicts itself.
Right before closing the lender pulls another credit report and confirms everything if you have lost your job and have no income there is no way underwriting will sign off.
It is worth having someone look .
karla
p.s.
thanks for the nice words Michael.
lender and builder are two different entities. the builder got earnest money. in the builder's contract it reads as i say. so even if the lender balks on lending at the last minute the builder can keep the earnest $$$. this is why it is completely ridiculous that a builder can write "we have up to 24 months to complete the home" in their contract.
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