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I made a contract on a house which was to be null and void should I not get approved for a mortgage. Got denied & buyer wants my deposit.

1 Answers. Asked on Jul 20th, 2014 on Contracts - Maryland
More details to this question:
I found a house and when I went to make an offer, there were already 2 offers so I offered $5000 over asking price. I was pre qualified for a conventional mortgage, however, when my offer was accepted and I put my official application in, it turned out my DTI ratio was too high and I was declined. I told my realtor what happened and that I could not get the house. He pressured me into applying for an FHA loan which I never intended on doing but I did, and again, got preapproved. When my realtor let the seller know the situation, they said they would only accept if I would agree to pay any and all repairs that the FHA inspector found. I did not agree to this, so I terminated the contract which my realtor said I had the right to do because of the section that said if you apply for [convenional] financing and get denied within 40 days of this contract, it is null and void and the deposit ($1500) will be returned to the buyer. The seller now wants to sue me for the deposit. What can I do?
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Answered on Jul 21st, 2014 at 1:19 PM

sue the seller for breach of contract.

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Most people and business enter into contracts on almost a daily basis. Simply put, a contract is a legally binding agreement between two parties. One party makes an offer to do something in exchange for "consideration," or payment, and the other party accepts that offer. Contacts can be verbal, in writing or even implied. Some contracts--such as signed credit card receipts--are very simple. Others--such as those used to buy or sell real estate--are far more complicated. If you are entering into a complex transaction, it pays to hire a contract law attorney as early as possible in the process. Your lawyer can help negotiate the terms and conditions of the agreement, then draft the contract or review the contract that has been presented to you. Law firms with experience in contract law can also defend you if you or your company has been accused of breaching a contract, or if you need assistance enforcing a existing contract.
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