First time purchaser troubles.....

[cade]

Hey everyone,
I was attempting to purchase my first home in Michigan, upon researching and interviewing several agents I found a "buyers agent." Upon looking at houses for approx. one month, I made an offer on a house with a mort contingency and a house inspection contingency. After making the offer I received word I lost my job, way to go Michigan. Speaking with other agents and real estate attorneys I was made aware of the possibility of breaking the contract and receiving my earnest money deposit back even through I was initially approved for the mortgage but not do not have the money to execute the deal. However, my own agent, the salesman from the mortgage company and the seller?s agent have been working behind my back to still push this deal through, nothing like 100% commission sales jobs knowing full well my job lost and inability to secure the downpayment money. I made them aware of my problems but it has become painfully clear they were ramming this deal down my throat knowing my inability of closing using a mix of threats of legal action and " its ok, everyone needs to start somewhere with buying a house."

My question is, how valid is the agreement of losing your job? The salesman of the mortgage stated it was no problem, upon calling the processing agent of the mortgage company, she stated knowing now I have no job they could not close on the loan. I get the feeling she already knew but was overlooking this to hook her mortgage sales guy up with pushing the deal through. I then get word, I was approved and they it doesn't matter if I have the money or not. To make this interesting, I work as a contractor for a large automotive manufacturer, not a direct employee, which they claim makes my argument non valid.. Nonetheless, this is my only source of income and it proofed The mortgage guy was giving specific information from my agent in an attempt to sour my ability to utilize the mortgage contingency and now he is stone walling my attempts of using the mortgage contingency. I have asked him for a letter stating knowing I have no source of income and minimal savings will they proceed with the loan, which he won't be mailing anytime soon. He knows the sellers and my own agent want my deposit and this could assist me. This stinks of foulplay but it would be expensive to prove.

Upon expressing my issues regarding my loss of employment, my own agent, stated, not only could I lose my earnest money deposit, I could be sued for all these other damages and lose huge during arbitration, which smokes of a licensed real estate agent providing legal advice. My agent has repeatedly spoken directly to the sellers and who knows what was said. Now, having spoken with real estate attorneys, the contract specifically states, "upon default by purchaser the seller may elect to enforce the terms or use the earnest money deposit as liquidated damages." The feel I get for the agent is he is looking to capitalize on his share of the deposit, which he gets 1/4 per the contract, namely $1250. Is it possible to default on a contract and lose even more money or is it capped at the amount stated in the contract? My agent is unwilling to accept $3500 from my deposit money I have willingly offered just to end this with a mutual release and not pursue my entire deposit giving the legal costs and my sense of fairplay. Instead will only settle for his share of $5000, the sellers agent will be giving their money to the seller. He states now I should await from him to here the next step in the process. I signed an arbitration agreement and was looking to gather others opinions on my options.

Please help me think Cleary on this. At the end of the day, if I lose $5000, I will look upon as a learning lesson, but I would rather offer the sellers a more reasonable amount giving my circumstances. Can they truly sue me for more then the earnest money deposit?

Thanks!!!!!

[marc]

Hello Cade,
I don't know your contract of course. But read through it carefully. Did you have an inspection done on the home? Some state that if you don't like something on the inspection you can back out. Some state that the owners need to be given a chance to fix it, so that wouldn't work. Has the mortgage company sent you a complete approval letter with no contingencies? If they have contingencies such as employment verification before closing, then you know they won't be able to close. Most mortgage companies have this, if they don't, I would research some sort of predatory lending issues with them.
Good luck