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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 39018
Experience:  Attorney and Real Estate broker -- Retired (mostly)
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We are in escrow on a property and have not removed our loan

Customer Question

We are in escrow on a property and have not removed our loan contingency yet. The deal should close on July 30. We have some concerns about the property and loan and are getting cold feet. We have also identified another properly that we fell in love with and would love to move to forward with instead. We would like to get legal guidance on our rights as far as walking away from the first property to pursue the other property instead. We want to make sure our deposit is not going to be in jeopardy. Can someone help discuss these issues with us?
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Barrister replied 2 years ago.
Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.
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If you still have a loan contingency in place for the financing of the property, then if your loan isn't approved, then you can withdraw from the contract without placing your earnest money in jeopardy. The loan contingency is your "escape clause" here and if the loan fails, you can walk away.
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But you would actually have to be denied a loan in order to exercise this clause and can't walk away without a denial from your lender without being in breach and giving the seller grounds to keep your earnest money as liquidated damages.
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However, you definitely don't want to move forward with any other property until you have been denied your loan for the first property so you don't risk being in breach of the new contract if you are approved for the first loan.
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thanks
Barrister
Customer: replied 2 years ago.
(Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 2 years ago.
I think it would be easier to speak live.
Expert:  Barrister replied 2 years ago.
Unfortunately a one on one phone call is a service I can't provide as it could imply an attorney - client relationship which I am prohibited from engaging in under my independent contractor agreement with JustAnswer.
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I can continue on JustAnswer's pubic site or if you prefer, I can opt out of the question and open it up to other experts who may be able to assist further..
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thanks
Barrister
Customer: replied 2 years ago.
Hm, that is too bad. Are you familiar with California rules? We have heard very different answers on this question. We have been told we can walk away without jeopardizing our deposit simply by stating the loan terms we have received are not favorable. Even our agent has been telling us that.
Customer: replied 2 years ago.
Btw, our loan has been approved but we are still working through the conditions.
Customer: replied 2 years ago.
if you cannot help, please open it up to others. We need help asap.
Expert:  Barrister replied 2 years ago.
Ok, I will opt out and open the question to other experts as someone else may be able to better accommodate your requests for a phone call and live discussion.
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No need to reply as it will only lock the question to me and prevent other experts from assisting..
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thanks
Barrister
Expert:  socrateaser replied 2 years ago.
Hello, Different contributor here. I am a member of the State Bar of California and a California Real Estate Broker. I would be happy to discuss your concerns offsite. I will send you an additional services request. You may accept or decline at your convenience.