What a nasty surprise - signed a purchase contract 10 days ago and now I find out im getting laid off in the next 2 months...

Contract has a loan commitment leter contingency clause, but its likely that I will get approved anyway as my financial info has already been submitted to lender...how do I back out? help!

Call the lender and let them know your situation?

buster2056, thanks for your advice...the problem is the contract states that if I dont qualify for financing due to "job loss", seller still keeps the deposit...

Presumably you have a lawyer if you are this far along in the process - I would consult with him. Maybe there are other reasons why you might get rejected for financing. If it's a co-op, you could show up drunk and get rejected...

Excuse me - I would consult with him OR her. That was unintentionally sexist of me.

alex, you may sabotage the board approval. Tell them you are a drummer.

thanks buster and stakan ;)

How do you know the drum riser's level? The drool comes out of both corners of the drummer's mouth.

Seriously, how far can someone push it before the seller fights the buyer for the deposit claiming he/she blew the interview on purpose?

alex123, sorry to hear the news. Is it a co-op w/ a typically long delay until closing? What are the odds you'd have a new job lined up before the interview?

tenemental, yes, its a co-op. Not sure if we'll have a new job soon...would like to get out of this thing if at all possible.

If you have prior arrests, now would be a good time to bring them up.

Seriously, talk to your lawyer. The best route may be to let the co-op board know that you will be unemployed. Even if you have financing secured, the board will probably have concerns. I am sorry for your situation - it's lousy for all parties.

Don't give up any hope. Things might turn around tomorrow.

thanks guys

Agreed - when you submit your Board package write UNEMPLOYED diagonally across the front page in red letters. You might want to add a footnote: Short-term prospects dismal.

Good luck.

stevejhx, any original suggestions from a big time real estaste pro ;)?

"the problem is the contract states that if I dont qualify for financing due to "job loss", seller still keeps the deposit"

Sorry to hear about the situation alex123, but this clause is a killer

Yes, I was going to say the same thing but deleted before posting because it seemed so devastating. It seems the seller wanted to protect themselves against exactly what happened. The only thing that I could possibly think of that might help is IF you could find someone else who wanted to buy it AND the seller would accept transferring the contract to the new buyer. O/w, the seller is probably in his/her rights to keep your deposit and any new offer as well. Even if you could find another buyer, it would really depend very much on the good will of the seller....

I don't think that contract clause is enforceable - how will you know why the lender rejects you? They typically don't say.

The seller might argue that it was because you lost your job, but they can't prove it. If they don't give you your deposit back, put a lien on the place.

thanks steve - appreciate your help. btw, the part about "job loss" was part of the standard contract text, not a specific clause added by the Seller.

Again - consult your attorney. I don't have the luxury of reading the language of the clause, but if it only pertains to financing, a board rejection for unemployment (a valid concern) should not trigger the seller's ability to keep the deposit.

alex,

Curious, how much extra is the mortgage+maintainence than your current rent?

If you have a 1 year+ of savings to cover the difference and you got a good deal on the place+you like it.. you might want to consider to keep it?

is it large enough to pull in a room mate if the co-op allows?

Contracts generally have language stating that if the buyer purposefully flunks the board exam, seller keeps the deposit. Look for that.

I'd look for subtle ways to make your candidacy unappealing to the board.

These responses seem very questionable to me -- not only from a contractual basis, but from an ethics basis.

Selling a property costs the sellers in that during the in contract period, the property is off the market and costs them opportunity costs. Placing an incontract place back on the market may damage the image of the apartment, too. People will ask if there is something wrong with it discovered in due diligence.

I understand if you do not want to take the risk of finding a new job after you close -- but sabotaging a board interview is a severe breach of good faith conduct.

Try to cut and deal or roll the dice -- but the sellers should not be left with nothing. It is a contract and your word. Shame on others for offering such unethical advice.

What a stressful crappy scenario Alex123. But I have to say way to go manhattanfox. If everyone thought like you we wouldn't need all these contracts and all of the lawyers would lose their jobs and have to become gardeners or painters or make music. Perhaps Alex123 it is time to do just that.

Also, not everyone is a litigious bastard. Personally, while I would be put out by this situation if I was the seller I might not savor the prospects of kicking you when you're down. Maybe your seller is a real mensch. But if prices come down since your contract they will probably look at the deposit as making up the difference of the lost revenue from being off the market. And not be so menschy after all.

And lastly, is getting a new job and moving forward with the deal out of the question? Are you a typewriter repair guy or something?

Good luck.

I agree that it is a crappy scenario - for everybody involved. Thanks, kgg -- I meant to say "cut a deal", not "cut and deal" -- but appreciate your approach to try to have an honest conversation about it with the sellers.

You need legal advice at this point from a real RE attorney--not someone who dabbles in it 10% of the time and does divorces and wills and small claims the other 90%. If you don't have a heavy attorney on this, go get a consultation with a lawyer at a RE law firm or who really is at least a serious expert. Even if the consulation costs $250/hr. and it takes 5 hours (which sounds like a lot), it's pennies compared to what you stand to lose. This is not the time to make things up as you go along or miss creative solutions.

""btw, the part about "job loss" was part of the standard contract text, not a specific clause added by the Seller.""

Your attorney should have deleted that clause. Shame on him/her for not catching that. And the suggestions to 'sabotage' the board interview are really bad advice; I hope you're not taking them seriously. If your seller can demonstrate you did such a thing you'll likely never see your deposit returned even if the board were to reject you.

bramstar - showing up drunk to a board interview (as I jokingly suggested) is obviously sabotaging an interview, however, is letting the board know that you are currently unemployed? You are just being honest about your current situation and letting them make the judgment. Seems to me that this would be both an easy and ethical solution.

^^^ Buster, I was referring to such sage advice as 'walk in drunk' and 'tell them you're a drummer'. I said nothing about being honest, which of course is the right thing to do no matter what the goal. But all joking aside, the buyer should be aware that the seller could fight to keep the deposit if there is any suggestion of impropriety on the part of the buyer during the board interview.

Buster, I think that telling the board that you're unemployed could be taken as sabotaging the board review since the advice is to go in & smile nicely & say as little as possible - plus there's that little issue of 'job loss' doesn't negate the sales contract.

look for another job... you have two months, that's a long time.

Caveat: I am not a lawyer, and this is not legal advice. However, consider being honest with your seller. Given the options of you continuing to go through with the process earnestly (with a significant chance of being rejected despite your honest attempts) and having to return the deposit 2 months later, or returning the deposit now and finding a new buyer in a better situation, the seller may be happy to let you out of the contract now.

If they want to keep the deposit, insist on going through with the process honestly (although as slowly as the contract/law allows, giving you time to possibly get back on your feet before closing).

""Buster, I think that telling the board that you're unemployed could be taken as sabotaging the board review since the advice is to go in & smile nicely & say as little as possible - plus there's that little issue of 'job loss' doesn't negate the sales contract.""

But it is very likely the board will ask him about his job during the interview. In that case it is entirely appropriate for him to disclose that he's recently unemployed. As for the sales contract, the standard clause that allows a buyer to walk if rejected by the board would take precedence, regardless of the fact that he was rejected because of job loss.

If the seller were to choose to make an issue out of it, claiming sabotage, that would be the seller's prerogative, of course. But he'd need pretty strong evidence--the buyer showed up drunk, made racist remarks, etc. I don't believe that simply disclosing the truth about one's employment could be considered sabotage.

Bottom line though--if the seller chooses to make a stink and keep the deposit for any reason, it will require effort and legal fees for the buyer to get it back.