Re: Cancel a home sale

Your right to cancel without loss of your deposit depends upon your contract. Frequently, a good-faith and sufficient effort to meet a financing contingency requires more than just applying to a single lender or loan broker, but your particular situation may be unusual since you seem to be buying from a broker. You really need to review your particular contract terms and perhaps also be ready to show that you made real efforts to qualify somewhere, and didn't just passively give up after a minimal effort because you lost interest in the deal or were easily discouraged.

Re: Cancel a home sale

The answer depends on your sales contract--was there a loan contingency in it? And what needed to happen to trigger the loan contingency? If there was, it's likely you'll get your money back, and can sue in small claims court if you have trouble getting it back.

Re: Cancel a home sale

You need to review the purchase agreement you signed to buy the property and/or escrow documents. If they state that your obligation to purchase is contingent upon obtaining a loan, and you cannot (after exhausting more than just one source), then you may be able to cancel. There are two reasons I say "maybe." First, some contracts are written with maximum allowable terms that you were willing to accept on a mortgage. If your real estate agent did you a big disservice, and put some rediculous loan terms you are willing to accept, you may be required to go forward with what is commonly referred to as a "hard money" lender. There aren't many of these folks around any more, so its not likely, but you will have to look carefully at the contract. Second, some real estate purchase contracts state that financing is a contingency until escrow closes. Others, however, set a time limit on obtaining loan approval, or cancelling escrow. If your contract falls into the later category, and you missed the deadline, you might have a hard time cancelling escrow and getting your money back. No matter what, put in writing immediately to the Seller's agent that you are not able to obtain a loan approval, and therefore request that the escrow be cancelled and your money returned. Also send a copy to the escrow company.

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