[worried_and_scared]

Hi,

My husband and I are selling a 1 bedroom Co-op in Brooklyn. We had an offer from a couple mid-August and have just signed the contracts mid-September. But we just got a call from our attorney yesterday and she told us that the buyers' are now saying that they've been turned down for a mortgage. Given the current climate I know this is quite plausible, but I think they are using that as an excuse, because right after they made their offer, they were trying to force us out and pushing for a Sept. 30th closing date. They told us they were pre-approved to close in 3 weeks and that they didn't see the problem with being able to close by the end of September. Given our experience with the Co-op Board procedures we knew that that was an impossible closing date and we were shooting for one at the end of November.

The buyers are a working couple with high-powered jobs and have put down approx. $34K as a deposit. Our co-op is valued at HALF of what newspapers are reporting the average price of a 1 bedroom unit here and my husband was qualified for the mortgage on his own before we joined incomes. I find it very hard to believe that they cannot get a mortgage after putting down such a large amount. AS far as I know neither has lost their jobs since then as I offered to deliver the Co-op application package just last week and they were both working then. My gut feeling is that they were not turned down for a mortgage, but are trying to back out because the flip tax on the unit is 5% instead of 3%. I need some answers to a few questions:

-is it normal for people to enter into a contract without being pre-approved?
-what happens to the deposit and the attorney's fees we already paid?
-what responsibilities do they have to compensate us for taking it off the market, lost wages, attorney's fees, moving expenses already incurred (we're moving to the UK)?
-if they can't furnish a mortgage denial letter, are they obligated to honor the contract we all signed?
-are they obligated to make more than one attempt to secure a loan now that they signed a contract?

[MarkRealEstateConsultant]

Hi,

My husband and I are selling a 1 bedroom Co-op in Brooklyn. We had an offer from a couple mid-August and have just signed the contracts mid-September. But we just got a call from our attorney yesterday and she told us that the buyers' are now saying that they've been turned down for a mortgage. Given the current climate I know this is quite plausible, but I think they are using that as an excuse, because right after they made their offer, they were trying to force us out and pushing for a Sept. 30th closing date. They told us they were pre-approved to close in 3 weeks and that they didn't see the problem with being able to close by the end of September. Given our experience with the Co-op Board procedures we knew that that was an impossible closing date and we were shooting for one at the end of November.

The buyers are a working couple with high-powered jobs and have put down approx. $34K as a deposit. Our co-op is valued at HALF of what newspapers are reporting the average price of a 1 bedroom unit here and my husband was qualified for the mortgage on his own before we joined incomes. I find it very hard to believe that they cannot get a mortgage after putting down such a large amount. AS far as I know neither has lost their jobs since then as I offered to deliver the Co-op application package just last week and they were both working then. My gut feeling is that they were not turned down for a mortgage, but are trying to back out because the flip tax on the unit is 5% instead of 3%. I need some answers to a few questions:

-is it normal for people to enter into a contract without being pre-approved?
-what happens to the deposit and the attorney's fees we already paid?
-what responsibilities do they have to compensate us for taking it off the market, lost wages, attorney's fees, moving expenses already incurred (we're moving to the UK)?
-if they can't furnish a mortgage denial letter, are they obligated to honor the contract we all signed?
-are they obligated to make more than one attempt to secure a loan now that they signed a contract?

Is it normal for people to enter into a contract without being pre-approved? Normal - no, but pre-approval is easy to get and means that the buyers have "talked" to a Mortgage banker/broker

-what happens to the deposit and the attorney's fees we already paid? Your Sales Agreement should have a financing contingency - if the buyer is denied credit or the terms are outside of the scope as they were written into the agreement then the Buyer has a legitimate reason to void the agreement. ASK FOR A COPY OF THE DENIAL LETTER. YOU DO NOT NEED TO "TRUST" THEIR WORD. The deposit is refunded ands you shouldn't have paid attorneys fees yet.

-what responsibilities do they have to compensate us for taking it off the market, lost wages, attorney's fees, moving expenses already incurred (we're moving to the UK)? NONE if the legitimately failed financing and the sales agreement you are using is approved by the State Board of Realtors.

-if they can't furnish a mortgage denial letter, are they obligated to honor the contract we all signed? GENERALLY YES

-are they obligated to make more than one attempt to secure a loan now that they signed a contract? NO not obligated