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Getting deposit back from builder

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ellekayw

Junior Member
What is the name of your state? FLORIDA

We gave a home builder (a large national company) a deposit and one way we're entitled to getting it back is if we don't qualify for the mortgage. Well, I am a stay at home mom and my husband was out of work for over 3 months, he is going to start a new job at the beginning of next month. The house was supposed to be ready in January, and now they're telling us it will be ready by early October.
There's no way we can come up with the closing costs, let alone the down payment, having gone through most of that money. We were pre-qualified, based on a large savings account and a nice salaried job - both are no longer applicable.
We called the builder - tried to do the right thing b/c we chose certain upgrades so now they wouldn't have to add those - to tell them we want out. Well, they said it doesn't matter b/c we won't get our deposit back! I said the contract says if we won't qualify for the loan we are entitled to get it back. They said we WERE approved for the loan. BUT even the loan papers read "this is not a loan approval. Loans are based on supplemental documents (ie financials, pay stubs, etc).
So they are keeping our deposit, which I think is a crock. What do YOU think? Do we have any recourse??? We've dealt with customer service and the mortgage loan office.
-LK
 


panzertanker

Senior Member
ellekayw said:
What do YOU think?
-LK
I think you are either going to have to buy a house, or walk away from your deposit. What do YOU think about the builder having to spend the money to build YOUR house and then have YOU say "oops, sorry. I don't want it now"???
 

ellekayw

Junior Member
I know but this builder is going to make a ton of money selling this house for more than we would have paid, but that's not really the point. I mean, if the contract is written that if we can't get financing we ought to get our deposit back, but they are saying otherwise. Of course, they get the final say, so we'll just have to walk away from it.
-LK
 

acmb05

Senior Member
ellekayw said:
I know but this builder is going to make a ton of money selling this house for more than we would have paid, but that's not really the point. I mean, if the contract is written that if we can't get financing we ought to get our deposit back, but they are saying otherwise. Of course, they get the final say, so we'll just have to walk away from it.
-LK


No you do not walk away from it. You take the builder to small claims court and get your rdeposit back. IF your contract had a stipulation about you getting financing and you can't get financing then the builder cannot keep your deposit.
 

lwpat

Senior Member
The thing is that you will have to make an effort with at least two lenders to actually obtain the loan. If the builder is going to make a ton of money, why don't you go ahead and put it on the market.
 

panzertanker

Senior Member
acmb05 said:
[/B][/I]

No you do not walk away from it. You take the builder to small claims court and get your rdeposit back. IF your contract had a stipulation about you getting financing and you can't get financing then the builder cannot keep your deposit.
I have read this that the OP already had financing in place, and now due to finanacial setbacks, wants out.

OP:
Did you qualify for the finanacing
BEFORE
you had the builder start on the home and you signed the contract?
 

ellekayw

Junior Member
We signed something that says we have to keep the house for at least 1 year before we sell, so that's why that isn't an option, unfortunately! (they want to keep the community to residents, not investors).

We did get 'preapproved' for the loan, but it's written ALL over the document that 'this is not a loan approval. Your loan will only be approved after documentation of financials, employment stubs, etc.'

And we were not able to get finanacing through another lender, either. AND now they are telling us the house will be ready in September!!!! (initally said end of January). So there's really NO way we could get qualified in that short time.

Thanks to everyone for responding.
 

panzertanker

Senior Member
ellekayw said:
We signed something that says we have to keep the house for at least 1 year before we sell, so that's why that isn't an option, unfortunately! (they want to keep the community to residents, not investors).

We did get 'preapproved' for the loan, but it's written ALL over the document that 'this is not a loan approval. Your loan will only be approved after documentation of financials, employment stubs, etc.'

And we were not able to get finanacing through another lender, either. AND now they are telling us the house will be ready in September!!!! (initally said end of January). So there's really NO way we could get qualified in that short time.

Thanks to everyone for responding.
So, to understand the answer:
You did get preapproval, but no firm approval with contract?

Also, you CAN get approval for a loan in the almost 45 plus days you have to get it. It would only take about 10 business days if you sincerely wanted it.

Based on your post, you either have to buy the house or lose the deposit.
You obviously submitted the pre-approval letter that got the builder to start the home for you. This seems to be the reasoning they are using in holding you to the contract. I suggest you take your contract to a lawyer for review to get all the nuances looked at, so you have a definitive answer.
 

ellekayw

Junior Member
Yes - preapproval but not a firm loan approval. We no longer have a lot of the funds we were going to use for downpayment and closing costs, so there's no way w/in 60 days we'd have any 'proof' of funds for those things.

I guess you're right - they are considering the preapproval as an approval. I do know a real estate attorney so I might have her take a look at the documents.

Thanks again.
 

Buk1000

Member
Question for the OP, did you use the builder's lender? Some builders have their own mortgage co, or use a preferred lender. IMO in-house lending can lead to problems with approval being given for more house than the buyer can really afford, and for purposes of not returning the earnest money. Only earnest money is generally refundable, not money paid for upgrades etc.

But it's no more a guarantee you got the loan than from another lender. IMO your best chance of recovering the earnest money is if your loan is not approved, now that your financial situation has changed.
 

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