Posted by River City on June 01, 2005 at 06:01:36:
If the contract states that the purchaser must obtain loan approval, and the loan was rejected because of an unacceptable appraisal, then the purchaser should receive their earnest money back. It is not the fault of the purchaser that the property was unacceptable. Have you seen the adverse notice to the applicant? Before releasing the earnest money, you should receive a copy. What can you as the seller do to make the property acceptable to the lender? Have you asked? You might be able to fix the problem. Good luck.
Return of Deposit Monies - Posted by Steve
Posted by Steve on May 31, 2005 at 22:02:26:
A Buyer and Seller enter into a standard real estate contract using real estate agents. The Buyer provides a “mortgage commitment” within the alloted time frame but the day of settlement the mortgage company backs out. The house appraises at the proper value, but the mortage company backs out for other reasons relating to items about the property noted by the appraiser.
Is the Seller entitled to the deposit monies, or not? The buyer did obtain the commitment on time. However the Seller relied on the “mortgage commitment” and kept the property off of the market for the time to settlement. Can the Seller be entitled to the deposit or does the mortgage company “commitment” which includes various clauses like “ACCEPTABLE appraisal”, etc cause problems?
Re: Return of Deposit Monies - Posted by Natalie-VA
Posted by Natalie-VA on June 02, 2005 at 10:23:58:
As River City stated, it sounds like the appraisal was unacceptable due to property condition, not value.
Our local contract has language that requires the seller to correct problems identified by the appraiser up to a certain dollar amount identified in the contract. If real estate agents were used, I would like to think that their contract also has this language.
If the dollar amount for repairs exceeds the amount agreed upon in the contract, either the buyer or seller can walk.
In most cases, the buyer would get their earnest money back since the contract was probably contingent on financing.