surrender full contract deposit and pay broker fees ? (sale, apartment)
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I received a contract that basically says if my employment changes I will surrender my entire deposit (it also outlines in another article that I'll pay the broker's fee). Is this typical or normal for a regular sale?
"Purchaser cannot cancel this Contract pursuant to and cannot obtain a refund of the Contract Deposit if the Institutional Lender fails to fund the loan:
because a requirement of the Loan Commitment Letter concerning the purchaser is not met (e.g. Purchaser's financial condition or employment status suffers an adverse change; Purchaser fails to satisfy a condition relating to the sale of an existing residence, etc.) or
due to the expiration of a Loan Commitment Letter issued with an expiration date that is not more than 30 business days after the Scheduled Closing Date."
exact articles in contract:
18.3.7 Purchaser cannot cancel this Contract pursuant to
18.3.1.4 and cannot obtain a refund of the Contract Deposit if the Institutional Lender fails to fund the loan:
18.3.7.1 because a requirement of the Loan Commitment Letter concerning the purchaser is not met (e.g. Purchaser's financial condition or employment status suffers an adverse change; Purchaser fails to satisfy a condition relating to the sale of an existing residence, etc.) or
18.3.7.2 due to the expiration of a Loan Commitment Letter issued with an expiration date that is not more than 30 business days after the Scheduled Closing Date.
I believe this is not a common practice, but it can be done. You can have anything in contract as long as is not illegal. It just doesnt look like you got a good contract.
I received a contract that basically says if my employment changes I will surrender my entire deposit (it also outlines in another article that I'll pay the broker's fee). Is this typical or normal for a regular sale?
"Purchaser cannot cancel this Contract pursuant to and cannot obtain a refund of the Contract Deposit if the Institutional Lender fails to fund the loan:
because a requirement of the Loan Commitment Letter concerning the purchaser is not met (e.g. Purchaser's financial condition or employment status suffers an adverse change; Purchaser fails to satisfy a condition relating to the sale of an existing residence, etc.) or
due to the expiration of a Loan Commitment Letter issued with an expiration date that is not more than 30 business days after the Scheduled Closing Date."
exact articles in contract:
18.3.7 Purchaser cannot cancel this Contract pursuant to
18.3.1.4 and cannot obtain a refund of the Contract Deposit if the Institutional Lender fails to fund the loan:
18.3.7.1 because a requirement of the Loan Commitment Letter concerning the purchaser is not met (e.g. Purchaser's financial condition or employment status suffers an adverse change; Purchaser fails to satisfy a condition relating to the sale of an existing residence, etc.) or
18.3.7.2 due to the expiration of a Loan Commitment Letter issued with an expiration date that is not more than 30 business days after the Scheduled Closing Date.
Sounds like you are buying a house/condo or something and they are telling you up front if you do not complete the transaction, you're screwed.
What contract basically says if you do not perform (take the apartment/house or whatever) you forfeit your deposit *and* are still liable for broker's fees. They are also telling you upfront they don't want to hear your loan fell through, you lost your job or suffered a decrease in wages, or any of the other points laid out in contract. In short it is a very long legal way of saying "give me my money".
Pretty straight forward and rather standard. If you signed this piece of paper, then that is that anyway. If you haven't then it might be a good time to consult competent legal advice.
I was about to be like WTF then realized that IF this is for a home sale or mortgage agreement then yeah they are just covering their ass in case you make an excuse that you can't go through with the sale so they at least recoup something for their lost time or losing out on other potential buyers.
Without knowing the specifics, my first instinct would be to walk away and look elsewhere.
Looking elsewhere may not solve anything.
As stated those conditions or similar are or have become pretty much boilerplate these days.
People are getting tired of the games or whatever some egits play. That is wasting their time and so forth then turning around at last minute and want out of a deal because the sun rose this morning in the east.
Then the market will disintermediate, and people won't be able to sell their property. I'd never sign a contract like that.
Why? All the contract does is allow seller or whomever to recoup their costs in case *you* back out for an unacceptable reason.
While you've put an offer on a place or whatever a seller has turned down/away others. Then you bust out with "I'm sorry but my bank said "no", or "I just lost my job".....
All the contact does is give the other party certain rights. They *may* choose to let you (or the OP) off the hook, then again maybe not. Depends upon what game you bring and perhaps how they feel about your reasons for wanting to back out.
Again it is standard boilerplate for most contracts to contain some language regarding breech, and the other party's remedies.
It looks like you waived your "mortgage contingency". Most brokers and lawyers will advise against this unless you were absolutely 100% sure you will get the loan (which you can never be 100%). Its possible that the bank will find something wrong with the property which is completely out of your control and you will be on the hook for the deposit.
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