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backing out of house????

What is needed to be able to back out from a contract on a house due to not getting the funding needed and not being able to get the loan? Do i need something in writing from my lender? can i just tell the agent i wasn't approved?? how does this work? any info would be great!
  • October 20 2011 - US
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Answers (2)

First, you should review your purchase agreement. Most contracts that are used by Realtors include a clause that states that the purchase agreement may be terminated if the buyer has made a diligent effort and is unable to get financed for the mortgage. If in fact you cannot get financing and the purchase agreement contains the termination clause as stated above, then you'll need to get a letter from your lender stating the reason why you were turned down for the mortgage. This should be dated on the mortgage companies letterhead with the signature of the branch manager. Once this has been obtained, your Realtor should be able to provide and complete the proper documentation to request a release from the purchase agreement (Mutual Release Form). If you're not using a Realtor for the transaction, it would be a good idea to consult a real estate attorney. Hope this helps.

I wish you luck, 

Walt O'Riley 
RE/MAX Excel Realtors 
  • October 20 2011
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Hopefully your agent made your offer contingent on (depending upon) you obtaining financing. She should ask the lender for something in writing stating your financing was denied, have you sign an adendum for your good faith deposit to be returned to you and get that to the seller's agent to release you from the contract.

Good luck!
  • October 20 2011
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