What are the seller’s rights if the buyer’s lender does not fund at the time of closing?
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What are the seller’s rights if the buyer’s lender does not fund at the time of closing?
I am a seller of a condo. Both the buyers and I signed the documents to close on this month. However, their lender did not fund the transaction. This is
after the lender has caused 2 delays and we have signed extensions 2 times.
Can I take the earnest money of $4000 and take my property back in this case?
Asked on August 17, 2018 under Real Estate Law, Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Unfortunately, you closed and transfered title--what would have been better to do would have been to NOT close until you had proof or verification of the funds (e.g. that they had been wire transferred). Since you did close, you would have to sue the buyer for breach of contract (violating the contract by not paying) and seek a court order requiring that the property be transferred back to you and also that you be allowed to keep the earnest money. You are entitled to the earnest money and property if not paid, but you have to file a lawsuit to get it--and if paid in the meantime, before the case is heard, they will be able to keep the property.
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