I signed purchase agreement with all intent on purchasing a home,but with word of lay offs for state workers,can I get my deposit if I change my mind?

I work for the State of California and have been working less than 2 years. I had recently signed a purchase agreement for a home, without knowledge of the State Budget Crisis getting worse, since they have already taken 2 days of our pay. Now there are plans of laying off state employees and adding a 3rd Furlough day the the 2 days they have taken away from us. Is there any way for me to get my deposit/down payment back becuase I am scared, if worse comes to worst of losing my job in the near future, and wrecking my credit.

Asked on May 25, 2009 under Real Estate Law, California

Answers:

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The answer depends on how far you are into the real estate deal.  Did you retain a mortgage or are you still in the process of obtaining one (i.e. has the mortgage contingency date expired?).  If you have not obtained a mortgage, then you can probably get out of the deal by letting the mortgage contingency date lapse and then the deal is over and you can get the down payment you may have put down back.... the question is however, what the specific contract says about the deposit.  Some contracts say that you lose the deposit if you fail to secure a motgage.  I would need to see the contract.  I suggest you have your real estate lawyer look at it and determine the ways to cancel.  without seeing the contract, i cannot give you a definitive answer.  at the end of the day, you can always negotiate with the sellers and they can give it back to you notwithstanding the contract.  based on your circumstances, the sellers should be understanding.


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