Question: My real estate sale has stalled and the buyer seems like they are not going to be able to purchase my property due to their loan not getting approved. How do I get out of this deal and find another buyer?
Answer: I am going to assume your contract had regular language in regards to the time to remove contingencies. Normally the buyer has seventeen days to remove all their contingencies such as appraisal, loan, property inspection and agreed upon repairs. At the end of that period the seller sends the buyer a Contingency Removal form to sign off on all those elements of the sale. If they have signed off on all contingencies and then are not able to perform in the transaction and cancel you will be able to move on and keep (generally) the deposit money they put into escrow. If they have not signed off and are past the seventeen days and you are concerned they are not going to perform, then you can send them a Notice to Perform, which will allow you to cancel the contract and move on but not keep any of the deposit money. It may be that your buyer is concerned they are going to lose that deposit if they cancel and are dragging it out in hopes that they can work out the issues with their loan approval. Your agent may have a preferred lender they use and should call the other agent to suggest they change lenders and try your lender to see if it can get approved. You want to be sure that your paper trail supports the cancellation and it can be helpful to check with your agent who can check with legal to insure you are covered in a cancellation. In the future you need to get a loan approval upfront from the lender to give you the confidence that the buyer is qualified and has a loan approval when they put in the offer. While that is not a surefire guarantee of final approval, it does tell you the buyer has done their due diligence ahead of time and is prepared to purchase a property at a certain loan level. If they are purchasing your home for $700,000 and are approved for a loan of $500,000 and are putting down $200,000, then you also want to have a proof of funds for the $200,000 in the form of statement copies from banks or financial institutions to back up that amount. Your Realtor will be able to lead you through that process. I know it is frustrating when the process lingers on and you get concerned it is going to have to start over. Hang in there and you will enjoy the success you are looking for soon.
