Posted by River City on August 01, 2003 at 08:39:49:
The builder’s representative is responsible for giving you a reasonable estimate of closing costs. Evidently, that did not happen. It appears the rep GROSSLY under estimated the closing costs. You will have to qualify for the home, and that means that you will have to show that you have the funds for closing in your bank account. I would move my funds from the account and place them in another account with another bank, so the mortgage company will not be able to verify them. Hopefully, you have not already furnished the lender with copies of your bank statements indicating that the funds are there.
Another action would be to tell the builder that you are going to the television crews with your story. Sometimes that will either get you out of the contract or the builder will limit your closing costs to the estimated amount.
I have signed a contract to buy a new construction townhouse in New York City. Between the real estate agent, mortgage broker and my lawyer, I was told that the closing costs were going to be around $10k. After about 2 weeks, I brought all the paperwork to my mortgage broker to complete the application process and was told at that time that closing costs are going to be at least $19k (no points) and plus, I will have to put out the money for the extra stuff we asked to be put into the house. I could not afford that, and since the house, as I was told, would not appraise for any higher then the selling price, I went back to my lawyer and asked to cancel the contract. It has now been 2 weeks and the lawyer for the builder has not responded and my lawyer is not doing anything to get at least a yes or no answer.
What are my options? Can I get out of the contract? Can I go get another lawyer? I know there is nothing in the contract about not returning the money - can I loose some?
Can I get out of a contract to buy? - Posted by John Merchant
Posted by John Merchant on August 02, 2003 at 14:22:40:
RC’s comments are on target, but I couldn’t tell whether you already have “earnest” money paid in that you might lose. If so, if you don’t close as agreed, you might lose that $$$.
This is the reason so many smart people just use an EM note, payable at closing, so they don’t/won’t lose money if deal goes south.
From my legal research, few buyers are sued and nailed by Judgments when they have backed out & away from deal & don’t close.
Whereas Sellers are routinely ruled against, not so with Buyers. Underlying reasoning is with the Seller, he’s got a unique property that can’t be duplicated by any other property on this earth, whereas that’s not true about the vanishing buyer. There are several billion other folk who could possibly show up as buyers, so the vanishing buyer is hardly unique.
Just be aware that if you have money on deposit with the title/escrow company, they can’t and won’t just send it back to you without a total release from all other parties.