Posted by John Corey on March 15, 2006 at 02:30:38:
You are asking what the contract says and therefore what is legally required.
If you sign an earnest money (purchases and sale agreement) then that document will detail under what conditions the earnest money can be kept or refunded.
Note the money is not a down payment. It is earnest money showing that the buyer is serious.
If you accept a deal that is subject to financing and the financing is unlikely to work (over appraised value, etc) then you are accepting a weak offer that is likely to fall apart. My point is to use the correct forms (sales agreement for your market) but also consider if the offer is likely to stick.
As to making concessions if the deal is otherwise ready to go. Minor repairs for items that were not obviously a defect before the offer was made could be discussed. If you are selling as-is and the item that needs repairs was obvious when the offer was made the agreed price reflects the condition. Also consider the cost of restarting the process with another buyer vs. compromising and closing the deal.
Side note. If you do a deal where the buyer is ‘over financing’ you are likely participating in mortgage fraud. No bank would allow over financing other than some specific loan programs. It could be that you have raised the price and created some cash back. In that case it would not be over financing is the numbers are declared and the appraisal shows the value is there. Hence it can not be ‘over financed’ if the appraisal shows the value is there.