DON’T just make offers! - Posted by Ron (MD)
Posted by Ron (MD) on September 19, 2001 at 08:36:36:
Based on the information you gave…coupled with the critical information that you didn’t even think to give…it is clear that you have no business entering into this deal.
You’re right, it is very unlikely that you will be able to walk away from closing with cash. Furthermore, sensible investors don’t want to have to borrow money up front to pay for expected negative cashflow down the line.
As for what exactly to do now…
The listing agent and your buyer’s agent will both be very unhappy with you. You will definitely earn a (well-deserved) bad reputation with them. As far as hurting your reputation long-term with your local RE industry, it is doubtful unless you are in a very small town. Don’t get me wrong, I’m not saying you should shrug off what you did…it was dumb and unprofessional, but it won’t put you out of business forever.
As for the economic cost, it may be zero. Don’t let your husband sign the contract or loan app. Presumably, you have a financing contingency in your purchase/sale agreement that will allow you to recover your earnest money if you cannot get financing. You are very unlikely to get financing if your husband (and bread winner) won’t co-sign the deal.
I would be very apologetic and humble and be honest with your agent and mortgage broker, leaning heavily on your over-zealousness and inexperience. Presumably, the house isn’t even officially off the market until your husband signs, so the seller hasn’t lost any sales time.
Going forward, you need a lot more studying. Also, seek advice here before you sign a contract.