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NCREC: "I couldn't get a loan AND I'm not getting my earnest money back???"

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  • NCREC: "I couldn't get a loan AND I'm not getting my earnest money back???"

    From Betsy Penney, at the North Carolina Real Estate Commission, comes a reminder that the current standard North Carolina Offer to Purchase and Contract no longer includes a financing contingency:

    "I couldn't get a loan AND I'm not getting my earnest money back???"

    In addition, I think this note from Section 4 of the Contract Guidelines is quite helpful:

    "​​​​​​Buyer’s Due Diligence should include investigating the availability of any desired or required financing. Buyer should understand that depending on the length of time Buyer and Seller agree that the Due Diligence Period will last, it is possible or even likely Buyer will not know with certainty that the loan will be approved prior to the end of the Due Diligence Period. In such case, Buyer should make a decision based on the information Buyer has from Buyer’s lender at that time whether to terminate or proceed with the transaction. If Buyer terminates the contract, Buyer receives the Earnest Money Deposit back. If Buyer proceeds with the transaction and the lender does not ultimately approve the loan, Buyer would lose the Earnest Money Deposit if Buyer were unable to close without the loan. By making the loan qualification process a part of Buyer’s Due Diligence, Buyer and Seller have the ability to fairly balance the risk that the Contract may not close due to Buyer’s loan not being approved by shifting that risk to Buyer at a mutually agreeable date. The date that the risk shifts to Buyer is the date that the Due Diligence Period expires."

  • #2
    Very informative post. RMoore, you have a great knowledge about real estate. I am really very happy to join this forum and I am sure I will learn so many new things from here and gain my knowledge about real estate. Thanks for sharing this valuable information about real estate.

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