Did we breach our real-estate contract? And are we entitled to the earnest money?

[mjammy]

What is the name of your state? GA

We are the buyers. We had a realtor representing us as the buyer and the seller (dual-agency)-- she is a distant relative that we naively trusted.... We were supposed to close on Nov. 29, as the contract indicates. We asked for an extension to the 1st of December. They said ok. We never signed a unilateral extension, as required by the contract. She said we could sign it at the closing. On November 30, the realtor calls us and says that we will not be able to close on the next day because the financing for the loan is not complete, even though the sales contract said that it was "done".

We were unable to secure the loan listed on the contract-- a loan that we were told we were approved for---because the loan was contingent on showing that we had six months of mortgage payments in an account, which we did not have. For two weeks after the original closing date we work with the broker to get a loan. Her financing gets too "creative" for us (She was adding our name to paperwork for my mom's acct. and the bank refused to sign off on it...)

On December 13, we tell them we are no longer interested in buying the home, as we do not want to qualify for a loan on false pretenses.

On Dec. 14, the realtor calls us and accuses of "renigging" and breaching the contract and says that we must either buy the house or pay the 3% realtor commission fee ($5400), that we have forfeited the earnest money $500), and must also pay the $600 that the seller paid for some pest work that was done...

My questions:

Isn't it a "dead deal" as we did not sign an extension, and the contract expired on Nov. 29 at 11:59:59? We never signed an extension. Therefore, aren't we not obligated to pay them ANYTHING?

Wasn't it dumb of them not to get us to sign an extension?

Shouldn't they not have put "done" in the contract (regarding the loan obligation) when it wasn't really done? Isn't this considered that the financing "fell through", which means that a term that the agreement was contigent on didn't work out? As I understand it, there is usually a number of days written that you have to secure a loan, but ours said, "done."

Aren't we entitled to the earnest money, as the contract states that "the buyer shall be entitled to the earnest money upon a) failure of the parties to enter into a binding agreement, b)failure of any contigency or condition to which this Agreement is subject;..."
Furthermore, the realtor called US on the day before closing and said that we couldn't close because of the financing...-- WE WERE READY TO CLOSE!!

LASTLY,
How do we go about getting our earnest money back-- the Holder is their Broker of their real estate company. They are independent contractors of this company.

We think that they tried to intimidate us into buying the home through LIES, by saying that we were obliged to terms of a contract that was dead.

Please advise!

ThanksWhat is the name of your state?

[lcannister]

duplicate post