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The seller tells me (in an email) that the earnest deposit can be used for another home within an year if my contract falls through. Without a signed addendum, would this email suffice if we had issues down the road with being able to use our deposit for another home?
Why in the world would the seller be telling you that you have to use the EM within a year? Would you be buying a different house from the same seller? Normally, if the deal falls through, and you are going to get your EM back, whoever has the EM just cuts you a check.
Is the seller a builder, and they are already holding the EM?
The short answer to your question is "usually not". Emailed communication is usually treated as just a conversation, in my experience. If they changed their mind and decided to fight you on it, and you had nothing with their signature on it, they would probably win. But if you don't have a contingency, and would otherwise be completely forfeiting your EM, I probably wouldn't push them on it, or they may change their mind now.
Either way, really need more information to give an educated answer.
More research and calling more builders in the area (Northern VA) - it appears as though this builder isn't necessarily unique. Almost all of the, have an Earnest Deposit requirement of 5% of the base price and do NOT have a contingency clause. Meaning, if your loan falls through, you lose the money. As simple as that. This appears a bit strange and bizarre to me in a market that isn't even close to being good (though the houses do seem to sell just fine in the area) but unfortunately that appears to be the case.
Are you allowing the contract to be written up on the builder's forms? They are always biased toward the seller. Are you not working with your own agent? If you were using your state approved (board approved, whoever approved) generic forms, they are almost certainly much more balanced.
Northern VA? Something does not sound right, at all. How on earth did you get a home built without a mortgage preapproval?
Don't follow you. Home is built by the builder. We just signed the contract to purchase it and the contract does not have a financial contingency. Builder just needed an earnest deposit. Understandable, because they stand to gain that money whether or not my loan is approved. This is standard process and no different from how other builders appear to do it, at least in the area.
Don't follow you. Home is built by the builder. We just signed the contract to purchase it and the contract does not have a financial contingency. Builder just needed an earnest deposit. Understandable, because they stand to gain that money whether or not my loan is approved. This is standard process and no different from how other builders appear to do it, at least in the area.
I'm sorry, but this still doesn't sound right, there has to be more to this story. My market is No. VA and my business is primarily builder referred. Yes, builder's can keep the EMD if you tie up the property for a period of time, have your preferences installed into the home (carpet, tile, cablnets, etc), but no reputable builder is going to sign a contract without a lender letter or their inhouse mortgage company approving the loan. Did you do something to change your financial situation?
It's not that the builder won't give you a finance contingency, it's that he won't give it to you for the length of time you need, up to a month prior to closing six months from now. It's unreasonable for you to expect a builder to tie up a lot for you with a contingency, to maybe get a mortgage loan next May. I don't know of any builder willing to do that, in fact, most won't even accept a contract without a strong lender letter, which it sounds like something you won't be able to provide, unless it's subject to income.
Builders take a hit when they load the home with your preference items, items another buyer may not want. I can see why he wants a non-refundable deposit.
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