Will I be breaching good faith efforts to obtain a loan approval if i purchase another home beforehand?
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Will I be breaching good faith efforts to obtain a loan approval if i purchase another home beforehand?
Entered a purchase agreement with a builder for a new construction. Contract looks like the only outs with return of earnest money deposit is to not get loan approval within 45 days of said contract or if the builder cannot complete the build within 2 years. There’s a second deposit next month.
A resale came available after signing said contract. If I put in an offer and get the home, then get denied on the loan approval because of it, will I get my deposit or deposits back?
Asked on December 22, 2018 under Real Estate Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
No, you will not get your money back if you don't qualify for a loan due to putting an offer in on and purchasing another home in the interim, since that case, you are not getting the loan due to your own actions. The law does not let you use your own acts to get out of your contractual obligations, so the builder will be able to keep all deposits made.
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