Expert: Jessica Bryan - 3/2/2008

Question
QUESTION: My husband signed a contract with the intent to buy a house and gave the real estate agent $1,000 in earnest money. Two weeks after the signing my husband discovered his job is in jeopardy, we notified the agent of the situation, she is non compliant and says the seller wants to proceed with the contract. We are awaiting the final decision on our financing from the underwriter due to the new circumstances. What can we do? Will this be void, or can they proceed? What rights do we have? Can they sue us for damages anything else?

ANSWER: Dear Dana;
since you already brought up the loan situation I don't have to point this out to you.  Of course, if you don't qualify for a loan you will have every right to cancel and receive your earnest money deposit back.  However, if you still qualify for the loan, then you will need to have another "out".  If you read over the contract, there are probably a few areas of contingencies that will give you an opportunity to break the contract.  However, it will be important for an attorney to look over the contract and help with that.  I know that attorneys can be expensive, but it might be worth it to avoid the Sellers filing a law suit against you.  Losing your earnest money deposit is just part of the expense. The sellers could sue for damages.  However, it is equally unlikely that they will see the wisdom in this since legal action is always expensive and there is no assurance how it will turn out and in whose favor.

Good luck and best wishes,
Jessica Bryan

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

QUESTION: Dear Jessica,
My concern is, the underwriter has a faxed a verification of employment to my husband employer and their  reply (the company) was  he is employed but this  is "subject to change." He was approved prior to the circumstances and were excited and ready to close the deal, we did not get this news until about 2 weeks after the signing, as soon as we were aware of the situation we notified all parties involved, therefore we asked the  the underwriter to take a second look because Our future now is uncertain he may not have a job. Is this the right thing to do?  Can they (the underwriters) still approve this, and do we have the right to get out of this contract? As far as contingencies, they were pending financing, appraisal in which the appraisal was ok
Thanks,
Dana

Answer
Even with the underwriters approval, they still will want to know if there is a change in job status.  I suggest you take any letter or written proof of the job issue to them and have them rescind their approval based on lack of future employment and job stability.

~Jessica Bryan