Will I lose my earnest money here?

Question

I live in California, and I am currently experiencing something that is freaking me out. My lender is being very slow and has not ordered an appraisal yet. I am out of my contingency period and have been given the notice to perform. All contingency other than appraisal has been dropped. The seller is threatening to cancel escrow and sue me for the earnest money.

Can they actually do this? What is the next step that I should do? Any help will be greatly appreciated.

David Avetisyan · Answer

If you are using a standard CA sales agreement, you probably have your loan contingency in place still.

Your realtor should be working on asking for an extension to buy you time. And if your loan officer can show that the deal is solid, I don’t see why the seller wouldn’t agree.

If you cannot perform and feel like the deal is going dead, just cancel and move on. They’ll have to refund you the deposit.

I have yet to see a seller sue because a buyer couldn’t perform given your circumstances -  especially when you still have protection under the agreement. I wouldn’t freak out.

To your success!

James Smith · Answer

@David Avetisyan

I have actively dropped all contingencies other than appraisal.  That is the main reason why I am worried.

Is that a really dumb move on my part?

Thanks for the help.

Brandon Carriere · Answer

In NV, you cant sue buyer, only try and keep the earnest money deposit..  Also, if you're out of the due diligence/inspection period, you cant just cancel and get your money back..  You'd need a denial letter from your lender, which they likely wouldn't be able to do..  Also, you'll need the appraisal to come in good or youre kinda screwed there too