If my closing date passes can I terminate a purchase agreement?
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If my closing date passes can I terminate a purchase agreement?
We are 3 days away from the closing deadline in our purchase agreement of a foreclosed home, and the required FHA repairs won’t likely be completed in time. We’ve felt like we’ve waited long enough, and we’ve found a better home nearby that we’d rather buy instead. The mortgage company has everything ready to close. The only thing standing in the way is the completion of the repairs. If the repairs are not done in time preventing us from closing by the deadline, can we legally terminate the agreement, get our earnest money back, and pursue another home?
Asked on November 22, 2011 under Real Estate Law, Indiana
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Most likely you will not be able to terminate the purchase of the home due to the fact the FHA repairs are not yet completed in that under the terms of your FHA loan, the repairs are required for closing. In order to be sure as to this opinion, I would consult woth a real estate attoney on the subject.
However, it is not the seller who is delaying the close nor you. It is third party experts making the required repairs as a condition of your loan to purchase the property. Had you not had a FHA ,oan, then you would have been able to close the escrow without the need for the repairs. You could have received a credit from the seller as part of a reduction in the home's purchase price. Good question.
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