Buyer terminates contract 3 days before closing due to failure to get loan. Does seller have any recourse?

UPDATED: Oct 1, 2022

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Buyer terminates contract 3 days before closing due to failure to get loan. Does seller have any recourse?

They said they the loan was going through until 3
days before closing. Reason they said that they had
to be on same job for 2 years to use bonus .
Wouldn’t they have told them that at the beginning?
We had sold our furniture, had to find rent a home,
and had moved a lot of stuff out.

Asked on October 13, 2017 under Real Estate Law, Arkansas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) The seller is entitled to keep the earnest money or deposit.
2) If your costs and losses (costs, etc. you would not have incurred if the sale had gone through, but which yoiu instead incurred because it did not go through) due to their failure to go through with the sale exceed the amount of the deposit, you may be able to sue them for the surplus; check your contract of sale to see if it put an limits on what you could sue them for (if there are limits in the cotract, they are enforceable, otherwise, you could sue for the additional money).

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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