Expert: Karyn Foley - 7/1/2006

Question
I originally asked this question to Mr. Dennis and had planned on asking a follow up question but he was maxed out.  I have copied the previous and current question I was going to ask him.  Any advice/opinion would be greatly appreciated! Thanks.


Thank you for your prompt response.  We were pre-approved for the loan and in my contract it states in the Third Party Financing Condition Addendum "If buyer cannot obtain Financing Approval, Buyer may give written notice to Seller within 7 days after the effective date of this contract (06-21-2006) and this contract will terminate and the earnest money will be refunded to buyer.  If Buyer does not give such notice within the time required, this contract will no longer be subject to Financing Approval.  Time is of the essence for this paragraph and strict compliance with the time for performance is required."  Does this mean that if we do not get financing approval within the 7 days that the contract is void?  If this is the case then would the contract have expired on 06-28-2006.  Thanks in advance for all your help!
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Followup To

Question -
My wife and I are supposed to close on a home at the end of the month but I have some concerns.  Number one is the monthly payment we will be getting into.  I work alot of overtime at my present job.  I have been working there for 10 months and generally get the same amount of overtime each pay period.  Recently when talking with a co-worker I was informed that although when you are hired the o/t is "guaranteed" the company has previously cut hours from 12/day to 8/day.  This amount of pay cut would cause me to be unable to make the new payment.  My next concern is that my contract includes an agreement that states that the sellers may lease the property from us for 14 days for $500.  While getting a quote on ins. I was advised that this type of agreement can be very messy to deal with.  I would like to get out of the contract in the most pleasant way if at all possible.  An appraisal has been ordered but the report has not been recieved yet.  I have locked in my interest rate with my lender and recieved a good faith but have not mailed back the signed application or submitted any documentation.  Do I have any options.  I know that I will loose my earnest money and probably have to pay for the appraisal but that would be better than being in a home I can't afford if the o/t is not allowed or getting into a sticky mess with sellers and possession on home.  Any suggestions/opinions would be greatly appreciated.  Thanks

Answer -
My guess is that this is your first home, Everett. Down through the years I have found that the first thing to watch for from a couple buying their first home is "buyer's remorse." The buyer usually looks for any kind of reason for backing out of their first purchase together. I hope this is not the case, because you definitely will be losing your earnest money deposit.

There is one way to squeeze out of this: Since your purchase is contingent upon you qualifying for the loan, make it so that the lender has not qualified you for the loan with which to buy the house. That way you should be able to get your deposit returned, but you would have to pay the appraisal.

One other thing. I have always discouraged buyers from allowing the seller to rent the house from the buyer after the close. I have seen too many nightmares develop from that arrangement. One of the most consistent is when the seller doesn't leave the house in good condition, and the buyer discovers things that were not there .  .  .  or were there . . . at the time of the walk-thru (you did do a walk-thru didn't you? Or are you going to do it after the sellers move out? And if it turns out that you don't like the way they left the house, it is too late. The property has changed hands and now you have to hire an real estate attorney to reverse the whole process.

I do wish you well, Everett.

Dick Dennis             dixiedee13@aol.com

www.oldproblemsolver.com

Answer
Dear Everett:  I will try for the third time to respond, after two unsuccessful attempts where I was confident that it had been correctly sent.  I do not wish to piggy back on another person's answer to you, especially when that person has made valid points.  Each time you ask a different person, you will receive slightly the same and slightly different responses.  Pick one person, preferably a real estate attorney, and stick with hin or her.  We cannot give legal advice, and your question is legally based.  We would need to look at your contract, as will an attorney, to see if your contingencies have already been met, or if there is still time for you to cancel without being in default.  You should call your agent's manager or office owner, as you are owed their support and effort in helping you resolve this issue. Good luck, Karyn Foley