How can I recover my earnest money deposit on a newly constructed home if I am declined for financing?

My wife and I signed a contract to purchase a new home in August of 2005. Since then, our finances have suffered because of unexpected medical expenses and a prolonged illness in the family, requiring our assistance. While the new home has been constructed like we dreamed, we have been declined for financing because of our debt ratios and because we could not come up with the down payment because my spouse has been helping her parents extensively and unable to earn a steady income. The construction company has given us two weeks to come up with financing, or forfeit our earnest money, approximately $34,000. I've worked with several different companies and all have declined our financing. The home was constructed in VA. After re-reviewing my contract, I did not find any financing contingency in there that would refund my deposit if my financing was declined ... it appears that the builder has insured that they could keep the deposit under all circumstances. Do I have any remedy?

that is usually a no-brainer clause in a real estate contract, that and if the home doesn't pass inspection (high repair costs). Your agent should have included that in the contract when submitting your offer.

The problem is if it is a new development, often they have their own agents doing the sales, so they probably aren't including any nice back door clauses like that.

But, your house has probably appreciated in value since your offer, so the builder might be happy to get out of the contract, too, so they can sell it for more.

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Okay, this is a longshot, but contact www.naca.com they are a non-profit housing advocacy group. they really aren't geared for people in your situation, but they hate real estate bloodsuckers and they might be able to strong arm this builder or recommend a decent attorney, or stage a picket in front of this development. NACA got their money from a predatory lending settlement against Fleet bank and now they do their own loans. Good luck, $34,000 is a lot to lose...

I would have a contract lawyer review your contract.

contact an attorney.

1) Get a lawyer

2) if there is no finance contigency - you may be out of luck.

3) in most states if you "own" something - ie. have title to it - there is a formal process to take the title away. (some states you own property and the bank holds the lien on the property - other states the bank owns the property and you have exclusive right - unless you dont pay

The first thing I would do is explain to the builder your situation and the illness and hope they take pity on you and return your money, or most of it anyway. It might be tough though because the real estate market is in very poor shape right now and he is going to have a very hard time finding a buyer. You may also want to have it appraised, or try to determine how much it's worth and see if someone you know wants to partner with you to buy the house and resell it.

As a last resort get a lawyer. Lawyers don't work for free though and often won't be able to achieve the results you desire.

You definitely need to talk to a real estate contracts attorney but if you signed a contract with no contingency clauses, you may be in a bad situation. You may have some limited recourse against your realtor if you were a first-time buyer because your realtor should never have let you sign a contract with no contingency clause, but if it's not your first purchase, that might not be an option either.

The people I bought my house from were in a similar jam--- unexpected problems with the financing and no contingency clause and they did not get their money back so you really, really need a lawyer on this.

CONTACT an attorney immediately. You have already waited too long if the construction is almost complete. You could also start pursuing a mortgage broker that knows what to do with a situation like yours to try to get you financing. You already have a down payment as you have earnest money applied to the total purchase price. The total situation has not been disclosed so it's hard to say. If you want more guidance feel free to conatct me!!