Trying to Terminate a Contract on a New House

Not being able to get financing IS defaulting unless your contract provides a contingency. Think of it this way: the builder is now missing a buyer. It doesn't matter what the reason, he's still stuck with a house that isn't sold. As for the upgrades, that's money the builder spent too-- even if they make the house nicer. The nicest of upgrades don't necessarily make the house easier or the builder to sell since they make the house more expensive.

Sorry to say but I think you're stuck unless your lawyer friend is a real estate expert and wants to write a letter and argue this with the builder for you.

When you put a contract on a home - you have to cover all of your bases and if you don't - you will be considered in default.

If your contract does NOT specifically state "upon financing approval" or something regarding financing, you will be considered defaulted....

Try another lender. Ask the builder for a reference to a lender...

GOOD LUCK!!

Unless you signed the contract with the contingency upon financing, you have defaulted on the contract. I have never met a builder who would start construction or make changes unless all contingencies were removed.

So if there was no contingency I would say your builder is being very flexible. It does not matter if you think the changes you make add value to the home, it only matter if another buyer would.

Did the contract stipulate that you have to qualify for financing or the deal is invalid? If not, you might have a fight on your hands. I have no idea how much it would cost to fight this, but I would contact a lawyer that deals with real estate matters. Usually the first consultation with a lawyer is free.

Good luck!

Echoing the other ladies, unless your contract stipulates a contingency based upon financing, then I'm rather leery of thinking you have any grounds to claim you aren't defaulting. Does your attorney friend specialize in real estate, in YOUR state or some other specialty?

For what it's worth, I NEVER sign a contract that requires binding arbitration. I ALWAYS want to be able to file suit. All arbitration does is LIMIT YOU in defense of yourself or making someone else make things right, in my opinion.

You may not want to wait this long, but your state might have the same things that KY does - ie, I put a small deposit on a house, then child got sick (possibly something very serious) and I was afraid to go thru w/it fearing to lose it quickly if sickness and such happened. The realtor kept the deposit - but 7 years later, my name shows up on an unclaimed property list with the state - and I get back that deposit!

Have your attorney friend write a friendly letter. I had to go to arbitration with a builder before and won. I bet the letter will work, they are probably calling your bluff.