Expert: Jessica Bryan - 2/28/2008

Question
QUESTION: Hi Jessica,
I signed for pre-construction condo in Florida (and paid 8% deposit) over 2 years ago and it has now finally been completed, but I no longer want to close.  Iīve tried to get out of the deal, but it seems impossible.  I would like to reassign and I would like to know if you have any amazing ideas about how I could go about doing this.  I have a realtor working on it in Orlando but so far, no luck.  Do you have any advice?  Thanks for your help.
Regards Jane

ANSWER: Dear Jane;
I have two questions about the deal.  First; have the prices gone up since you bought?  Second; is there anything in the contract that restricts you from reselling it immediately or assigning it before closing?

What are your reasons for not wanting to close?  If they are valid reasons, then you might be able to get help.

If the prices have gone up then it might be pretty easy to find a buyer who will buy it from you as soon as you close.  You could even get an earnest money deposit that you could use for the closing.  However, if you really don't want to close (or can't close?) then I would suggest you go to your lender to get a letter showing that you no longer qualify for a loan.  If you do still qualify you may be out of luck.  without having more information, I am not quite sure how to advise you.

~Jessica Bryan



---------- FOLLOW-UP ----------

QUESTION: Hi Jessica

Thanks for your response.  In answer to your questions, yes, we believe that the properties have gone up.  We bought ours very early in the pre-construction phase and by the end, the last ones were selling for 25 to 30k more.  Yes, we can reassign before closing...thatīs what our realtor recommends we do but we havenīt had any luck finding anyone to take it on.  Weīre not really sure how to find someone other than ask a realtor to help us...but they arenīt having any luck either...if indeed they are trying.  
They told us when we originally signed for the condo that we are not allowed to sell it for 12 months after we close (although I am not sure that is actually in the contract), but we are definitely allowed to reassign before we close.

As for not wanting to close, we are no longer in a financial position to be able to.  Our situation has changed since we were pre-qualified for a mortgage and we are now overseas and running a business.  We are expected to pay 20% deposit since we are not American, and we no longer have the funds, nor do we really want to tie up our money in America for years.

With regards to asking our lender for a letter, could you tell me how that would help us?  Would it delay the process, or would it in any way save our deposit?  This is the key...we have paid nearly 16k in deposit already and we are trying to avoid losing that if at all possible.  The developer says that he will not refund deposits, but until now we have not been forced to close.  We were supposed to close in December but we told them that we couldnīt and they gave us extra time to try and find a buyer.  They are now pushing for us to close again.  Our condo is in the first block, so construction is going on.  I believe that many people have been trying to get out of the deal, since construction took over a year longer than expected to be even started.  
Could you also give me more information on what an earnest money deposit is as Iīm not sure what that means.

Thanks for your help. Hope the above information helps you.
Jane

Answer
Dear Jane;
Your earnest money is the amount you gave as a deposit to hold the home for you.  There should be some clause written in the contract that says that you have to qualify for a loan. If you don't qualify, the contract is cancelled and all money is returned.  You should check this contingency carefully to make sure it is written in your contract.  If so, call your lender and ask if  (in light of your current situation) the lender would be unable to loan you the amount you need to close on this home.  If not, he must write a letter and forward to the builder.  If you can still qualify but just don't choose to spend the money, then I suggest that you write up a good ad to place on the Internet on sites such as Craig's list (www.craigslist.com)offering your condo at a substantially reduced price from the going prices.  Don't try to make a profit on this--just get rid of it before it closes.

Good luck and best wishes.

Jessica Bryan