Expert: Karyn Foley - 9/19/2007

Question
Hello
This is my dilemma.  On July 17, 2007, I put down a $2500 deposit for a condo.  According to the purchase agreement that I signed, I had 15 days to cancel the contract for any reason.  Unfortunately, I went through their preferred lender because I wanted the incentives that they offered by using them.  As I was waiting for my lender to get back to me with numbers for the price of the condo I chose the 15 days past.  During that time, I kept sending him emails asking him the status of my loan and all he would say is that my file is still in underwriting.  Way after the 15 days past he finally sends me an email stating that my debt to ratio is too high and that the numbers I gave to him originally were wrong.  According to the lender, he said I told him I estimated $5200 a month income when I actually had $3200 a month income.  I’m the one that told him I make $3200 gross a month.  I’m not sure where he got those numbers from.  It must have been a miscommunication somewhere.  Now, the title company contacted me stating that Paragraph 11( c ) of the contract was not completed so the seller will be getting my $2500 deposit. Many people told me to look through the contract and see if there was wording that states "contingent upon" or "subject to" financing.  But there wasn't.  Another thing that really concerns me is that two days before the closing was suppose to take place, the lender gets back to me saying that he finally got the numbers worked out, but I had already sent the letter to the developers stating that I was canceling the purchase.  My question is can they just take my hard earned money like that even though at the time of my cancellation I didn't have the financing to commit to the contract?  Or am I at the risk of losing my deposit since the lender did finally produced a loan for me?

Thank you,
Nicole  

Answer
Dear Nicole:  If you have an agent representing you, this person is the one who has the contract and should be giving you advice.  Since I do not have the contract, I can only state that the "many people" who told you to see about the contingencies and subject to financing were correct.  If you do nothing, you do stand to lose your deposit.  If you still wish to proceed, and why would you not want to if you can get the loan,thenspeak with the developers about proceeding as per the contract.  If you do not, then I strongly suggest you either try to work out an equitable solution, splitting the difference or whatever, of go to a real estate attorney.  After all, you entered into a binding contract with each party expecting the other to live up to the agreement.  Again, if you think that anyone is giving you anything other than which you agreed to, you should - at the very least - have an initial appointment with a real estate attorney.  He or she can put you in the right direction.  Keep in mind though, an attorney may end up being the same price, if not more than, the deposit.  You should also know that no money can be released TO EITHER PARTY WITHOUT THE CONSENT OF THE OTHER PARTY.  So, it is best to come to an agreement rather than have the money just go to the state after a period of years.  Each state has their own laws, too, so check out yours. I think that at this late date you are over your head as a novice buyer, so seek help.  And next time, you should have your own agent who represents you and only you.  Let me know if I can answer any more questions or be of additional assistance.  Good luck to you in this uncomfortable and scary situation.  KARYN FOLEY