Posted by Cheryl Lopez on July 10, 2004 at 24:21:45:
TODD –
Do you think you are getting a good deal?
Because if the house goes into foreclosure … then YOU will be dealing with the legal process the lender has to go thru and delays. Plus YOU will be competing against other buyers. Some of those buyers will have cash. So you will probably loose out on the house if it get into foreclosure.
See if the seller provides you with “credits” in escrow that will offset additional down required by the lender. I use credits all the time. In your case sounds like you will need 5% worth of credits.
And if this deal does not go thru … where is your earnest money deposit check (with the seller or at title)? Chances if the seller looses his house that the seller will not agree to release your deposit back to you.
Try to work with this seller … but time is running out for both of you. Lenders need time to process the loan and forward to title, and return for underwriter process, set funds in motion, wire funds to title, county record, title close.
I made an offer on a property using a contract that does not specify what happens if I can’t perform, i.e specific performance or liquidated damages, my mistake. The contract states that the deal is contingent on my financing. I was trying to get %100 financing using a 5% second and %95 first. The seller blew a gasket when I told him I need him to carry %10 instead of %5. He is days away from foreclosure and like a fool is playing hardball and not negotiating. He is threatening to sue me if he loses his house. Who is in the pickle here? Me, him or both. Thanks.
If your offer is contingent on getting financing and your contract doesn’t state you are putting x amount down where you are obtaining financing for the difference, then unless you can obtain the needed financing you can back out of the deal.
So the seller agreed to carry 5% and you agreed to get financing for 95%. Now you can’t obtain the 95% you need since the most any lender will loan you is 90% with the seller carrying 10%. So unless the seller agrees you can’t close because you can’t obtain the financing needed. The contract will become void when it expires. So what is the seller going to sue for? Your contract was contingent on being able to get financing. If you can’t get it, then you can’t get it. The seller would have no case.