Posted: Wed Nov 04, 2009 4:44 am Post subject: Help! I am the buyer and I have to back out before closing.
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We had a purchase agreement signed before mid October and we are closing for a house here in VA a week from now. But around late Oct, my husband got a job offer out of state, and it's a 10-hr drive from here. We are working visa holders that's why we don't have much options with employment opportunities.
I am still keeping my job here for now. But I would like us together as a family, so I may have to move there as well, and look for a job. Living apart is very pricey, financially not worth it, and I'm afraid that it will take a toll on us as a family, eventually.
How can I cancel the closing of my mortgage application, with not much of penalties at this points? My loan is already approved with conditions. Under what circumstances will the lender reject my loan?
Can I still back out at this point? What are my options, and the possible legal implications for this?
Have you signed any papers with the mortgage company? Check the papers carefully, if you have signed them and find out if you are liable to pay any penalty for backing out of the closing. But since you have not yet closed on the loan, you definitely have the right to back out of the deal. However, you may have to pay the application fees, appraisal fees and credit report costs. Until you sign on the closing documents, you are not legally bound by the terms of the mortgage agreement. Hence, there will not be any legal implications if you cancel the closing.
The lawyer who has handled my title search and who will be handling my closing, says that I can be liable for the:
1. expenses incurred by the seller (since they have already started to move out)
2. perhaps the realtor's fee, probably both mine, and the seller's realtor.
3. I will loose the good faith deposit.
Moreover, the lawyer says I can be sued for damages of backing out at this time, if I don't go for the closing. He even says it will probably cost me less if I continue the closing and sell the house 6 months later, than back out of the closing at this time. Now, it makes me think how true is this and at what costs can I be really held liable at.
I just spoke to the lender and they said I will lose my deposit, which is not a big thing. They have used for my application, appraisal, and credit report costs. My lender is not pushing to have the deal closed, because of the situation, but I feel that my lawyer and my realtor really wants me to close on time.
Now, I still don't want to close on the house, because I needed the flexibility to join my husband our of state. It is a big risk for my family to live apart, and financially, I'm not gaining more by this - we'll be working hard to break even with me (and a kid) and my husband living apart.
I will be more than happy to hear anyone's opinion on my situation.
I don't think it would be good option to purchase the property now and then sell it off after 6 months. Property values are continuously depreciating. So, it would be difficult for you to pay off the loan if the property is sold at a lower price. In my opinion, it would be a better option to back out of the deal.
Thanks
Teesha_231 Guest
Posted: Thu Nov 05, 2009 3:05 pm Post subject:
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Thank you for your responses.
The lawyer who will be handling my title search and my closing said that my only option is to have a release form signed through my agent, but it is unlikely that I will be able to get all parties involved to have the release form signed. The seller, the seller's agent company, and the buyer's agent company can sue me for the costs, agent's fee, and so on, and so forth, within the next 5 years, if I back out of the closing.
The lawyer says that I can be liable for so many things.
It is really too late for me to back out at this point? Please let me know what are my other options. The lender said that my loan is still approved (I'm hoping they will reject it) and the closing will happen as scheduled.
OMG! Please help before it's too late. I just want to get out of the deal, legally. We are only working visa holders so I do not want anything under my record at all. Please help!
I don't think you should face so much of problem if you back out the deal. I would suggest you to speak to your lender and check out what he has to say in this regard. He will be the right person to let you know whether or not you would be liable to pay those fees. _________________ Procrastination is the enemy of your financial success
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