What would you do if you signed a contract before the economy tanked?

yes

No, get your lawyer on the phone and re-negotiate. The seller would much rather work with you than have to wait 6+ months to have another bid/qualified buyer come their way.

Mazdap- Why? Gramercy girl- problem is I havn't sold my place yet and don't want to carry 2 in this economy.

That's a totally different situation then. Why don't you just become more aggressive in pricing your current home while trying to renegotiate with the seller of the new place? It sucks to walk from the 10%, if you have a really good lawyer perhaps they can drum up some valid reason why you should get the money back.

""if you have a really good lawyer perhaps they can drum up some valid reason why you should get the money back.""

They can drum all they want--you're not likely to get the deposit back without a lawsuit.

Lose 10% to prevent a 20%+ loss... sure.

Assuming this won't affect your cash position and you want to buy eventually.

If the present market value of your new place has dropped 10% or more below your contracted purchase price you should walk away. You are likely also required to pay all the developers closing costs, which is an additional 2%, plus your own cost, so you will save this too. Plus, I believe prices are heading even lower.

Squid--I beg to disagree, my sister went through this, I know first hand you can get your 10% down back under certain circumstances.

""Squid--I beg to disagree, my sister went through this, I know first hand you can get your 10% down back under certain circumstances.""

Well, spill it--what were the circumstances? A demonstration of fraud/misrepresentation or other bad acting on the seller's part? That might work. But remember that once money has changed hands it is extremely difficult (and potentially costly) to reverse.

Gramercygrl-what circumstances?

I think if you lost your job due to a terror attack, you might be able to get back your deposit.
That was relevant in '01, but hopefully will not be relevant anytime soon!

If the developer does not have a first closing by the date of specified as the start of the operation of the condominium, or if common charges increase by more than 25% from the level when the contract is signed, you can rescind the contract, otherwise it is very difficult and would require a lawyer.

""I think if you lost your job due to a terror attack, you might be able to get back your deposit. ""

But even there, you'd likely have to go to court to get it back. And that costs money.

Increasingly I would imagine that developers are not going to meet the first closing date requirement. Some unlucky people won't be able to take advantage of that, but other more lucky folks will. Pray for delays.