Backing out, Need Help Please

Small problem, so I signe a contract and put 10K into the sellers escrow. My mortgage commitment date is not until aug 12th, but my mortgage broker got the commitment in today. I want to back out of the deal and the attorney asked me to call the mortgage broker and have them not send the commitment letter to everyone.

The Mortgage company called my real estate (buyers) broker and they already know the commitment exists. This is a new property which will not be ready in August as promised by the sellers building company. My lock in rate for mortage is going to expire. What can I do to back out of this deal, since like the only person interested in helping me out is my attorney since it is in everyone else’s best interest for me to sell the property. Please advise.

Howdy jmarmole:

You are stuck at the mercy of the seller. Why did you put up $10,000 earnest money if you were not sure you wanted to buy the property? What size deal is it? About the only thing you can do is try to negotiate with the seller and reduce your loss. Try for getting $9000 returned to you and $1000 to the seller.

Hey jmarmole,
YOu made a big money committment and I assume this is a exlusive option . Ted has a good idea try to negotiate to lessen you monetary loss and my add on is to look for any exit clause in the contract you signed with help from your attorney. If the sellers gets a certain percentage of the earnest monies he may opt to be open to discuss that with you so he gets his legal consideration in you holding him up from accepting other offers.

Good luck to you on this…

Thanks for all the info guys. It turns out that they builders can’t make the closing date which is scheduled for the end of Aug. I will be alright after according to my attorney, on this day. Thanks for the information, you guys are the best.

Most of the builders I have ever contracted with will allow a buyer to withdraw from a contract and completely refund all deposits as long as the property has not been 80% completed.

It is not clear from your post whether you are buying directly from a builder, or, whether the seller is flipping the property under construction to you.

Most preconstruction contracts specify that the construction delivery date is not a guaranteed delivery date, but only a best guess which the builder will attempt to meet in good faith. Since rate locks are rarely given for more than 60 days, you need not apply for a loan until the builder has given you a 60 day notice of the completion/delivery date.

Even though your rate lock is about to expire, you can get a new rate lock at the current prevailing rate.

Same thing happened to me. I had applied for a loan and locked in my rate on a preconstruction property. The rate lock happened the day before rates increased by a half point. The builder had a 45 day delay in his construction so I just settled 45 days later than I had expected. In that extra time, my property value increased another $20K simply due to the builder’s price increases.

If the deal was good when you signed the contract, why is it not good with a little construction delay? Please tell us why you really want to back out of this deal.

The reason is because the builder promised some changes the apt that they are were not fulfilling. The also are not going to make the delivery date which would mean I have to sign another rental lease (+money I loose). I found similar apts in the same area already built selling for similar prices, I can just get one of those before my lease expires in my current place mid Sept. Anyways, I went to talk to the builders along with my RE Agent and using the info I got from here I threatened to back out unless they made the changes specified. We did not walk out of the place without new plans. The delivery is still extended til end of sept, but I guess it will be back to the parent’s house until then (they live about 1 hr away from work, so I can manage that for 1 or 2 months). Thanks to all

My next purchase will be a rental multi family unit. Which, if this deal had not gone through, I would have purchased instead.