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Talk to your broker and your title attorney. Each state has different contracts and this is a contract specific question. It is really important that you present it correctly to the seller/listing agent to get your buyer's money back. Be very careful what you say. Get your broker's help and advise from your title attorney. Don't go it alone.
Lise Howe has the right approach although I can't tag her for some reason.
Jacqueline Adj-Omania Assuming this means terminating the contract, check out the financing paragraph in the contract. In my State financing is a contingency to the contract. If the buyer fails to get financing, the EMD will be returned with no penalty. We also have a Release Form which the seller and buyer is required to sign to release the funds. Texas may have a similar procedure.
Good morning Jacqueline. Hopefully the purchase agreement set out what will happen if financing falls through and that the selling agent has made sure that the deposit is protected.
Make it a great weekend!
you'll need a denial letter and the EM depends on the terms of the contract was inside or out the contingency period for financing? But totally controlled by what the contract says.
Talk to your broker about local policies and laws.
I would be seeking other financing right away, but as to the rights of your client, it all depends on what your contract says.
I agree with all comments thus far. As always, check with your Broker for their policy on handling these types of matters.
A letter from the lender and yes here one gets the earnest funds back. It may take a while and gnashing of teeth but it all works out. Talk with your QB.
If you still have a loan contingency( and appraisal one), why would B. loose the EMD? Or you can try with a different lender if the seller agrees for the extension and you believe that a new lender will pull it through. ( Hard to speculate, since you did not mention a reason of a loan denial).
In most of the contracts the contract is contigent on buyer obtaining financing and they will get their earnest deposit back if they done everything possible to qualify for a loan but did not get it.
Show a letter from lender and have all parties to sign as a cancellation of contract. It really depends on the seller. If they have a back up offer they are happy to release you.
This is very common TFT......