If I made an offer to purchase a home, should earnest money be refunded tome if Iam unable to obtain a loan?
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If I made an offer to purchase a home, should earnest money be refunded tome if Iam unable to obtain a loan?
I had pre-approval from the bank based on my credit however because of my student loan debt I cannot obtain a loan. I deposited $1000 earnest money with the realtor and paid no due diligence fee. I understand that I have the right to terminate the contract for any reason during the due diligence period which was over 3 months ago. We did not close 2 weeks later as scheduled but seller really wants to sell and let me continue to try and obtain financing. It does not look like this will happen after being approved by 2 banks and then denied before closing. I tried everything possible.
Asked on September 27, 2011 under Real Estate Law, North Carolina
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you enetered into a written contract to purchase real propertyand were unable to close the escrow, you need to carefully read the agreement in that it sets for the the obligations owed to you to the seller and vice versa absent conflicting state law.
If there were certain express contingencies within the purchase agreement that required express waiver by you (inspections and loan approval) and you never waived these contingencies, then you are entitled to the return of your earnest money. If you were given a due diligence period where you could end the contract for whatever reason and you did so in that time period, you are entitled to your earnest money from the seller.
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