Went into contract but want to retract from it as we are having second thoughts about it.
We paid 3% earnest money to get into the contract. Any options to get the money back now?
FYI - The house is in SJ/Santa Clara and we paid $1.5M.
#housing #earnestmoney #lender
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See if you can go ten pc down and use the remaining to cover the gap
Start with another lender who can close within a couple of weeks .. a lot of lenders can do that for you. If you believe the first appraisal was shitty then the second appraisal will give you a chance
Meanwhile fight for a rebuttal with the original appraiser. But usually they are a bunch of rotten onions.. so you just don't get a win
Or maybe the house prices tank this month, and they lose 500k because of OP’s second thoughts.
If you don’t complete the sale by the agreed upon closing date, they will keep the earnest money and they will be free to list the house again. You can’t “hold up the contract”; there are no legal grounds for that.
BTW, even if a lawyer found a loophole, you are inviting a very well-justified lawsuit. Don’t listen to these people OP. Just find a sensible way to solve this problem; maybe the sellers will return a fraction of the earnest money if you tell them right away.
What can happen is that other buyers notice it went back on the market and wonder what’s wrong with it. So if that happens here, it could easily sell for 50k less.
OP, what is the source of your “second thoughts”?
They are giving up their home (even if someone offers them 1M extra next week, they can’t change the price to you). Likewise, you are giving up your right to walk away for free. You are within your rights to walk away, the price you pay is the earnest money.
The reason why sellers pick buyers with waived contingencies is because houses sell a lot lower (could be 10%) when they return to the market. Plus, it brings a lot of stress to them, and they could need the money urgently.
OP: I hope you manage to find another lender/appraiser on time; their process is quite random, so 5% fluctuations are very possible. Maybe your best bet is finding another lender altogether (so they don’t need to average the two appraisals). Also, you can suggest comps to them; they might use them.
Another option to close the transaction might be to use a different loan type, such as ARM. These might have worse terms in the future, but might help you rescue the 50k