I'm in California and just put an offer in on a home. My agent is coming over tonight to discuss the sellers counteroffer, which apparently contains a revision to the loan contingency. We went with the standard/default term of 17 days--they want it shortened to 3 days. Does this mean that if we don't obtain and get approved for financing within 3 days we will lose our earnest money? What if we obtain financing, however aren't happy with it? Can we cancel the deal at that point? Any legitimate help would be appreciated--we're first time home buyers and don't want to lose our hard earned $5000, just because the bank takes longer to process the paperwork than necessary, or there is some unforseen delay. Thanks.
2007-06-27 08:05:01 · 8 answers · asked by OLA 2 in Business & Finance ➔ Renting & Real Estate
Ask your realtor, but you should be OK. The key word there is that its got a "Loan Contingency". A Contingency is a way out of the deal- if you dont get the loan within 3 days, then you are both out of the deal... To be safe, you can have your realtor counteroffer with that specifically spelled out, just to be sure there is no confusion.
Good luck
2007-06-27 08:14:19 · answer #1 · answered by bmwdriver11 7 · 1⤊ 0⤋
Do not accept an offer with only three days on it! They will not even have provided you with the disclosures telling you what is wrong with the house. If you accept this offer and after 3 days they tell you the slab is cracked and termites are everywhere, you could not back out without losing some or all of your money. Also, in todays mortgage market, things take longer than ever before and problems often arise that were unforseen. Your Realtor had better advise you on this, or find a new one. You work hard for your money, make sure your agent is helping you keep it. 17 days is standard for a reason. If the seller will not give that to you, they have somthing to hide, walk away.
2007-06-27 08:44:10 · answer #2 · answered by Ron B 3 · 0⤊ 1⤋
You won't lose your earnest money if you don't get approved. The sellers just don't want to wait too long to sell so in 3 days will put it back on the market.
You lose your earnest money if you get cold feet and want out of the deal or if you don't do what you need to do to make the purchase.
Your agent should be able to explain exactly what the earnest money does and what would cause you to lose it. You may counter offer their counter offer and put in the terms you will need to complete the deal like that you obtain a FHA loan under 8% then if you are offered a conventional at 14% you don't need to take it and can still get your earnest money back.
Leave a loophole in your offer like subject to an inspection and satisfactory workorder so if they find something expensive you can get out of the deal and get your money back. Hire an inspector you find yourself not one with the realtor or goverment. A good inspector is worth the money even if you still need a government inspector they look for different things. Go with your inspector so he/she can point out things to you.
2007-06-27 08:15:51 · answer #3 · answered by shipwreck 7 · 1⤊ 0⤋
The previous posters are right on.
Definately write in the loan contingency. Not only that you get approved, but get approved below a particular rate, say 6.75%. Or perhaps your Realtor will suggest the contingency say "Subject to buyer receiving financing that buyer deems satisfactory" - something like that.
3 days isn't long enough for disclosures, inspections, appraisals and loan underwriting.
2007-06-27 10:44:17 · answer #4 · answered by godged 7 · 0⤊ 0⤋
READ the contract--carefully. Ask your attorney. Your realtor is right to counsel you NOT to miss the deadline, or you could lose your earnest money. You can request an extension of time in which to obtain mortgage commitment and close sale of home. If tomorrow is scheduled closing date, you may have already missed the date. If there are problems, it may mean you're not really capable of becoming a home owner at this time, that you are stretching your finances too thin.
2016-04-01 07:46:51 · answer #5 · answered by Anonymous · 0⤊ 0⤋
You don't have to accept their counteroffer of 3 days. Counter their counteroffer and maybe go with 10 days. You can decline it at any poing and they have to refund your earnest money. You earnest money was for that particular property under those particular terms. Once they change them, they are at risk of losing you as a buyer. If they had accepted your offer and then you changed your mind, then you would lose your earnest money (or at least part of it).
2007-06-27 08:10:19 · answer #6 · answered by sortaclarksville 5 · 1⤊ 0⤋
i am buying first home now and i believe i was told that you can get earnest money back up until your option period ends and the deal enters escrow. then it is too late, good luck, i hope it works out for you
2007-06-27 10:10:03 · answer #7 · answered by pooh bear 4 · 0⤊ 0⤋
Ron B is correct and I agree with him. He gave the best answer to your question but you may choose to do crazy instead.
2007-06-27 09:42:07 · answer #8 · answered by Nancy 4 · 0⤊ 1⤋