If you see this now, slow down!!! Who cares about losing $4000 earnest money compared to months of anxiety about being able to make the payments and worrying about tenants who may not be good stewarts over your investment. Don’t worry about what you have spent at this point. The real cost is a headache that you could be taking on. I would slow down, see if you can get out, and get your money back. If not, just don’t cooperate with the lender for the financing and let the deal fall through. This could be a costly mistake if you go ahead through with the closing.
Posted by Terry Billings on January 25, 2006 at 13:23:55:
I contracted for a new home 8 months ago and now we are ready to close. The property has increased in value only slightly and I may or may not be able to rent the property for enough to cover the mortgage. In addition I don’t really have the money for the closing. If I try to get the property I’m afraid I might be in dire straights 6 months down the road.
I’m thinking of eating my $4,000 earnest money deposit unless there is a way to get it back. I’ve asked, they said “too late”. Of course, they want to sell the property and the salesman wants his commission.
If the lender denies the loan that might be one way to get it back, but I would have to read the contract.
Posted by CHRIS IN FL on March 10, 2006 at 15:21:25:
TERRY, YOU SAID IT HAS INCREASED SLIGHTLY IN VALUE, RIGHT? HAVE YOU TRIED SELLING THE HOUSE, FSBO, AND ASSIGNING YOUR CONTRACT TO SOMEONE WHO WOULD LIKE TO BUY IT RETAIL (WILL YOUR CONTRACT ALLOW YOU TO ASSIGN)? IF YOU ASSIGN, EVEN FOR NO PROFIT, YOU CAN AVOID DEFAULTING, RECOVER YOUR $4K, AND AVOID DOUBLE CLOSING COSTS/FEES COMPARED TO TRYING TO PURCHASE IT AND THEN RESELL IT IN NEAR FUTURE. ALSO, HONESTLY EXPLAIN SITUATION TO BUILDER/SELLER, AND ASK IF THEY CAN HELP YOU OUT. MAYBE THEY HAVE OTHER INTERESTED BUYERS AND YOU CAN WORK SOMETHING OUT. GOOD LUCK.
Terry,
What was your plan when you signed the contract 8 months ago? What has changed since signing contract? What happened to closing cost money you had back then? It sounds like you did not reasearch the market enough. Was this an investment or for your residence?
Read your contract to see what options you have. Post some more info, it would seem like you jumped into this with out a plan.