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Please upgrade your browser to improve your experience. Is earnest money returned if the lender never comes through with the loan? All exceptions deadlines have past. I entered into a contract to purchase a home. Got "pre-approved" house appraisal came back above purchase price.

Mortgage company keeps delaying and we have had to do several amend-extends. Now the seller wants more earnest money before he does another amend extend. Since it appears this deal is falling through due to financing, will my earnest money be returned or do I lose it? Kevin Adams share 22 months ago Report. CiCi Martin, the time frame for turning in the earnest money is one of the dates and deadlines written into your contract. It can vary depending on the circumstances, but I often suggest that my buyers set a date somewhere around days after the contract is signed by all parties.

How many days after the sales contract has been signed do you have to turn in the earnest deposit. Bons Family- You need to seek legal advice in your situation. Unfortunately, you will lose your Earnest Money, unless you've extended your Loan Condition Deadline, which will give you ability to get out of the Contract with your Earnest Money.

But, it also will depend on Seller. If they won't sign Earnest Money Release, you won't get your money back and would need to do Mediation between you and Seller and if it does not work, Arbitration will be your next step.

If you still like the house, just negotiate with Seller. I am sure they want to close as much as you do. Consult your attorney and listen to your agent. They are there to represent your best interests. So, we had made a contract to purchase a home.

Though to do delays, some from us, some from the bank, concerning income guarantee we're not sure how we got pre-approved if this was a problem we have lost the contract.

It's a lot of money that we can't really afford to do over and over again. Kevin, It would depend on if the amendments to extend included an amendment to extend the 3rd party financing addendum.

If this date has not passed then YES you should get your money returned. Also, if it has not passed and you are staying under contract be sure to have it extended to accommodate a date that your lender suggest. I am hoping for the best outcome for you! Hi Kevin, There are three contingencies in most purchase contracts. Financing, appraisal, and inspections.

If any of these are not satisfied, then the contract may be cancelled, and earnest money is returned to buyer. If you already amended the loan condition deadline, your earnest money is safe till that date. If at that new amended loan condition deadline you still do not have an approval you could terminate the contract, and get back your earnest money check. If your loan is not approved before or at loan condition deadline you have the right to terminate your contract without loosing your earnest money.

Can I get my earnest money back?

Tipically is the last deadline in the contract, before closing. Hopefully this is your case. Read your contract thoroughly, it should spell out the obligations and rights of each part. I would also recommend you consult a real estate attorney as we are not attorneys and do practice law. Each state has different contracts and they can even vary throughout the state.

If your DD time frame has passed the only way you can get your earnest money back is Seller default. You will lose it. This is where your Realtor comes in.

It will depend - in your case - on what amends have been signed and the wording in them. It sounds like if you continue the seller has reached a point where they are trying to make it non refundable. Your Realtor could recommend doing an amend and raising the earnest money but extending one of the date to ensure you can get out of the contract if something goes wrong. It also depends if you are getting a VA loan. The seller cant keep that earnest money unless you have waived that right.

In California for the seller to keep the earnest money deposit the buyer has to remove all three built-in contractual contingencies Inspection, appraisal and full loan approval within 17 to 21 days after the sellers acceptance of the buyers offer.

Once those time frames are up the seller is supposed to request that the buyer remove the contingencies in writing.

If the buyer does not remove the contingencies then the seller can and should serve the buyer with a notice to perform giving the buyer 48 hours to comply or risk the seller unilaterally cancelling the contract. If the seller cancels the deal but the buyer never formally removed all of their contingencies then the seller has no right to keep the buyers deposit.

It may turn out to be a stand off and the earnest money deposit may sit in escrow for a while but ultimately the seller will have to release the buyers deposit less escrow fees. I hope this helps shed some light on your situation. It is reasonable for the seller to ask for a larger earnest money, since they accepted your ffered based on a certain timeline, and now your lender is falling through. You may want to push the lender a little harder to see what the reason for the delay is.

Is the loan coming in a week, a month, or most likely never due to an issue they cannot resolve.

The Importance of Being Earnest: All About Earnest Money Deposits

Typically once the deadlines have passed, you will not get your earnest money back. However at this point, you need to ensure the loan will go through, or don't put in more money and walk awaly from the sale.

Sometimes the lender can hekp with some of the costs if the delay is their fault, and not due to some issues of your credit, income, etc. Best of luck to you! Someties the lender can hekp with some of the costs if the delay is their fault, and not due to some issues of your credit, income, etc. It depends on how the contract is written. Normally, if there is a financing contingency, then the buyer will get their deposit back if they are unable to get approved for the loan. If all of your deadlines including loan commitment have past, NO you will not get your earnest money back.

That is what the loan commitment deadline is for, to protect your earnest money against these type of lender issues. I am assuming you are trying to amend the contract for the loan commitment deadline to protect your earnest money.

Is this the case? If you are given the extension then your earnest money will be protected but if you are not granted that extension your earnest money is not protected. In Colorado contract it is very specific. If the loan is not approved by the loan objection deadine, buyer has the right to terminate contract with earnest money returned. In your situation, if conventional loan, your are currently in default of the contract. It is now the seller decision on whether to retain the earnest money.

Loans are taking longer than in the past, mostly due to the shortage of appraisers. If your loan is approved pending the out come of the appraisal decision, most sellers work with the buyer. I hope this helps. The buying process have become very difficult. New on Our Blog So You Want to Live In… San Jose, CA?

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