If I’m 2 weeks from closing on a short sale, can the bank now turn around andstate that it’snot going to pay for closing costs?
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If I’m 2 weeks from closing on a short sale, can the bank now turn around andstate that it’snot going to pay for closing costs?
The house has been approved for $280K. Contract shows the bank agreed to pay $7,400 towards the closing (total for closing is $8,400). Last night I get a call from my agent saying that the selling bank will not give me the closing costs because I am taking a conventional loan instead of FHA. Is this legal?
Asked on October 7, 2011 under Real Estate Law, Maryland
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The answer to your question is to be found in the contract you signed. A contract, once executed becomes a binding obligation on both parties to it; either party may unilaterally change its terms or ignore its requirements. You say that you now have a conventional loan instead of an FHA loan--what does the contract say about that? That is, does it say that that you would get an FHA loan and the bank would pay closing? If it did, you getting a conventional loan may constitute a breach of the contract or otherwise give the bank grounds to not pay the closing costs. You need to reference the terms of the contract itself to see the effect of you getting a conventional loan. If it is not clear to you, you should bring the contract to an attorney who can review it with you.
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