Need advice on contract sale of my home??

[Toolrokz]

Hello I live in NJ and have a question regarding the contract sale of my house. To make a long story short I was hurt at work and this happened after we signed contracts to sell our house. Now I think we may have way out without breaching but not sure. This is written in the contract word for word in bold print: If the mortgage loan has not been arranged or if the buyer has not notified seller of buyer's decision to complete the transaction without obtaining a mortgage commitment, on or before July 7, 2000 then either buyer or seller may void this agreement by written notice. Now my question they have not had an appraisal of house yet and therefore could not have received commitment yet, if they do not receive it by July 7 can I void this contract without any legal consequences. Thaks. The part that says loan been arranged I assume they mean commitment? Would that be a correct assumption?

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Toolrokz:
Hello I live in NJ and have a question regarding the contract sale of my house. To make a long story short I was hurt at work and this happened after we signed contracts to sell our house. Now I think we may have way out without breaching but not sure. This is written in the contract word for word in bold print: If the mortgage loan has not been arranged or if the buyer has not notified seller of buyer's decision to complete the transaction without obtaining a mortgage commitment, on or before July 7, 2000 then either buyer or seller may void this agreement by written notice. Now my question they have not had an appraisal of house yet and therefore could not have received commitment yet, if they do not receive it by July 7 can I void this contract without any legal consequences. Thaks. The part that says loan been arranged I assume they mean commitment? Would that be a correct assumption?<HR></BLOCKQUOTE>

This is a very gray area. You are correct to assume that the loan commitment will suffice but keep in mind that thelender can issue a commitment without an appraisal. The document may be a preapproval letter or a loan commitment stating that the loan is approved subject to the following: real estate appraisal, fire insurance naming the lender as additional insured, termite clearance/structural inspection report etc. Even if the Buyer fails to perform within the specified date but provides the lender approval days later, industry standards may dictate no voidance of the contract.

 

[Tracey]

Since the contract specifically states that either party can void the contract if financing is not arranged or the contract affirmed by 7/7, you can void the contract on 7/10 at 12:01 a.m. However, if B gives you notice of intent to complete or loan approval before you give B your written notice that you are exercising your option to void the contract, B's delay will be considered a minimal breach that doesn't justify your decision to back out. In other words, it's a race to see who serves whom first. Further, if B has financing before 7/7 but just hasn't told you, even if you give notice, B can show proof that s/he had a loan in place & nullify your notice.

Have your letter ready to go & deliver it by hand ASAP. Make sure to note the exact time the notice was delivered, as 2 hours may make the difference. Read the contract carefully to see if you must serve B or B's agent or both to exercise your option. You should also check if you get to keep B's earnest money.

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

[This message has been edited by Tracey (edited June 27, 2000).]