How can I get my Earnest Money Deposit back???

[Lcrensha]

ATLANTA

I was purchasing a condo and had all the financing in place. The day before closing, the mortgage lender notify me and said that they could not finance the loan due to that fact that the condo was not on their “preferred condo” list. I notify my real estate agent and made him aware of the situation and then he called the seller’s agent and verbally notified her on the day of closing. He told the builder that we were waiting to hear from the mortgage company on other options. Well, a week went by and the lender could not do anything for me because of the current mortgage crisis in the US. My agent sent the termination of contract to the builder (5) business days after scheduled closing. The builder said that I defaulted on the contract and would not return the earnest money deposit due to no written notification on or before closing. I have read the contract and no where in the contract did it say that they must be notified on or before closing. What can I do? I feel like due diligence was done in trying to get financing and 5 days after closing was very reasonable time frame for a written notification.

Also, I was living in a hotel at my expense, so I didn’t have time to look for another mortgage lender. Help!!!

[seniorjudge]

What does your contract say about your questions?

[Lcrensha]

The contract does not state notification on or before closing or within a specific timeframe. It does state that notification must be in written form.

It also states that if financing is not obtained by buyer, EM will be returned to buyer. We also put a statement about contract contingent on bank's appraisal.

[tranquility]

"Contingent on bank's appraisal" is problematical as the property may appraise appropriately. "If financing is not obtained by buyer, EM will be returned to buyer" is much better. You may have to sue for the return of the money and let a court decide. To set this up, send a certified demand letter and state how you were unable to obtain financing even though you made a reasonable effort. I don't think I'd add anything about how you were in a hotel and couldn't attempt to get alternative financing as this may not be reasonable.

Let's face it. They are not going to just give you the money back. You will probably have to sue and you may very well lose as your excuse is not completely outside of your control.

[LindaP777]

Originally Posted by Lcrensha

Also, I was living in a hotel at my expense, so I didn’t have time to look for another mortgage lender.

I don't get this. Please explain.