Expert: Jessica Bryan - 11/9/2009

Question
QUESTION: We found a home we like and have paid the earnest money, home inspection, home appraisal, credit report which totals $1920.00 so far.  They cannot get us financed and we agreed (me and spouse0 to just back out of the deals.  This is the fourth contract since July of 09 and it is Nov 09.  We told them we wanted out and they insisted they continue to find financing.  We have changed our minds and would just like to end this contract.  They are refusing.  What can I do at this point?

Pat Simmons

ANSWER: Dear Pat;
If your contract states that the offer is subject to financing and states the terms of the financing then you are welcome to decide to back out of the deal particularly if you have tried with several lenders.  You stated that this is the 4th contract--do you mean that they have lost 4 buyers or you have tried to buy 4 different homes since July?  If the latter is the case, then I need to ask why you wouldn't know already whether or not you qualify for a loan.  I hope that you have an agent representing you who can look over the contract and explain things to you.  In the absence of an agent you may have to talk to an attorney to get out of the contract.  I am inclined to think that you are protected and that you can walk away from this with recovery of your earnest money.

Best wishes,
Jessica Bryan

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

QUESTION: Yes, we have signed 4 contract to by since July 09.  We were not pre-approved because they said since I was going VA our credit was not a factor.  Yes, we have an agent, but he and I are already at odds about this mess.  I thank you so much for your help.  I can't sleep, eat or be at peace cause I just want to know where to start to end this.

Answer
Hello again;
I am so sorry for your problems and hope that by canceling this contract you will be able to relax a bit.  If your agent is not helpful with this you should call the managing broker of the company to discuss your options.  also, you might be able to recover at least partial amounts for the costs of the inspection and appraisal if you reflect that you would be willing to share these with the next buyer of the house at a reduced fee.  The appraisal is good for six months and the new buyer might be able to use it if they can convince the lender.

Best of luck to you,
Jessica Bryan