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RealEstateAnswer, Lawyer
Category: Real Estate Law
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Experience:  10+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
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This past Saturday, I saw a home with LGI Homes in Georgia

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This past Saturday, I saw a home with LGI Homes in Georgia and signed a purchase agreement. I also gave them 500 dollar earnest money. I think this was a mistake as I scouted the area I would be staying in the evening and the neighborhood is worse than I originally thought, so I no longer want to move there. I have a scheduled first meeting with the mortgage loan officer tonight, so officially I have not been approved for the home loan amount as of yet. This would be our first meeting. I also think that I was stupid to think that it would be easy for me to come up with the 3.5% down for the FHA loan. BotXXXXX XXXXXne: am I now obligated to buy this house, just because of signing the purchase agreement on Saturday?
Hi! I will be the professional that will be helping you today. I look forward to providing you with information to help solve your problem.

Good morning. I certainly understand the situation and your concern. The purchase agreement is a legal binding contract, if agreed to and executed by both parties. As such, you would be expected to proceed with the purchase and act in good faith, pursuant to the terms and conditions stated within. However, the contract likely contains a lot of conditions which have to be met and I am inclined to believe that obtaining finance is one of them. As such, if you are unable to obtain the FHA loan as a result of your credit, income, debt or lack of a down payment, you could have a legal basis to walk away, assuming you can obtain evidence from the loan officer, that you can not qualify. In addition, read the contract and see if it contain a period of time where you have a right to walk away or cancel. Often times, there is an inspection period and time for you to perform your due diligence, which could benefit you in this situation as well. If you fail to perform and advise them you are not going to close, they could proceed and sue you for damages suffered, which also will be stated within the contract. This may be a situation if you read the contract, where their damages are limited to only the deposit you gave, depending on the time frame in which you backed out.

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Customer: replied 3 years ago.

Okay, so even though I have not officially qualified for the loan, I am still obligated to the house because I signed the agreement? Yes, a loan approval is a contingency for the house. Therefore, do you have any advice for the meeting that is scheduled with the loan officer for this evening? If I absolutely do not want the house, should I even bother collecting all the paperwork? Do I just attend the meeting, tell the officer that there's no way I can come up with the down payment, and then do not fill out the loan application? I am very nervous in terms of making this whole thing worse and don't know what my next step should be and i only have 8 more hours until that meeting. Any further advice?

At this point, there is a contract and you have a legal obligation to make a good faith effort to proceed and obtain financing. You still want to meet with the loan officer and obtain all the conditions for the loan. If you can not come up with the down payment of 3.5%, you will not be able to close on the loan, even if you qualify for everything else. As such, you would need to disclose this to the loan officer and try and obtain something in writing from them, saying you can not obtain financing. This way, you have evidence to show the seller. Of course, the issue will remain as to why you signed the contract and were aware of the 3.5 % you would have to come up with that you did not have but proceeded anyway but things often change. It is possible you had the money and ended up having to use it for something else or something else resulted in the inability to obtain it. Talk with the officer, explain your current situation and let him/her be the one who says you can not qualify. This way, you have a basis to walk away, since a condition was obtaining financing and they will not give it to you.
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Customer: replied 3 years ago.

Does a right of rescission law apply to me in the state of Georgia, being that I just signed the Purchase agreement on Saturday? Curious if that law will allow me to get out of this Purchase Agreement contract.

It would not apply in this situation. Here is the reason why.

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