By Gary M. Singer
(MCT)—QUESTION: I am trying to buy a home and was pre-approved from my bank. Unfortunately, the lender turned me down for the loan. The seller is not agreeing to give me my deposit back. What can I do?
ANSWER: The answer to this question depends on the contract you signed with the seller. All contracts for the sale of real estate must be in writing, and the written contract controls the details of the transaction.
Most contracts contain clauses that will allow the buyer and/or seller to cancel the contract if certain events happen or don’t happen. Some of the more common contingencies are for inspections of the property, the seller’s ability to convey clear title, the property appraisal and the buyer’s ability to get financing.
These contingencies contain deadlines that must be strictly followed. For example, a contract may say that if the buyer can’t get loan approval within 30 days, he or she may cancel the contract without penalty. In this case, if you are denied on the 28th day and you notify the seller, you are entitled to your money back. But if you wait until the 31st day, you would lose your deposit.
It is important that you get the denial letter from the bank and properly notify the seller in writing before the deadline. If there’s a dispute about the contingency and the seller balks at returning your money, the terms of the contract also will dictate what action you must take to get the money back. Sometimes you can sue the seller, but in other cases you will need to go to arbitration or have a state board decide what happens.
In your situation, you need to read the contract and see if there is a financing contingency. Make sure you followed all of the conditions and deadlines. If you did, you should have no issue getting your deposit back. If you didn’t, contact a local attorney to see if any other options are available to you.
When you enter future contracts, write down all of the deadline dates on your calendar. Doing this will ensure that your next deal is much smoother.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar.
©2012 Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services
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