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  1. #1
    cr_allison Guest

    Question What happens when the contract expires?

    What is the name of your state? Mississippi

    We signed a contract on a house with acerage and another parcel adjoining with acerage. Before we drew up a contract, we asked the seller if they could split up the parcels so financing would be easier and they said no. They drew up the contract for the entire place. We were unable to get affordable financing (even after pre-approval) because the land value exceeded the home value so conventional mortgage would not work. However, we did not find this out until AFTER the deadline date for closing had come and gone.

    1. Are we still obligated to purchase since nothing could be worked out with the banks?

    2. Since the contract date had expired, no adendems were drawn up extending the contract. Since we knew we could not afford the place in the manner being offered (we would have to come up with over 30K in cash money) is it okay for us to assume the contract was dead and find a more affordable place?

    3. What damages can the seller sue for? They cashed our earnest money check 2 days after we gave it to them. Do we still owe them anything since no broker was involved? (For Sale By Owner).

    Any advice, or shared experiences would be greatly appreciated.
    Thank You!
  2. #2
    HomeGuru is offline Senior Member
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    Re: What happens when the contract expires?

    [QUOTE]Originally posted by cr_allison
    [B]What is the name of your state? Mississippi

    We signed a contract on a house with acerage and another parcel adjoining with acerage. Before we drew up a contract, we asked the seller if they could split up the parcels so financing would be easier and they said no. They drew up the contract for the entire place. We were unable to get affordable financing (even after pre-approval) because the land value exceeded the home value so conventional mortgage would not work. However, we did not find this out until AFTER the deadline date for closing had come and gone.

    1. Are we still obligated to purchase since nothing could be worked out with the banks?

    **A: if there was a financing contingency in the contract ie purchase of the property is subject to Buyer's obtaining financing at 80% L/V 6% interest and 2 points.
    *********
    2. Since the contract date had expired, no adendems were drawn up extending the contract. Since we knew we could not afford the place in the manner being offered (we would have to come up with over 30K in cash money) is it okay for us to assume the contract was dead and find a more affordable place?

    **A: no, see above.
    *******
    3. What damages can the seller sue for? They cashed our earnest money check 2 days after we gave it to them. Do we still owe them anything since no broker was involved? (For Sale By Owner).

    Any advice, or shared experiences would be greatly appreciated.
    Thank You!

    **A: see above. If there was no financing contingency, then Seller can sue for breach of contract.

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