Legal Question in Real Estate Law in Arizona

Re: contract cancelation

It is possible that you could lose your deposit (aka "earnest money"). But, it depends on the particular terms of your contract. Generally, a contract for a new home includes a "financing contingency" which states that if your loan application is denied, you can get your money back. However, most financing contingencies I have seen set a time limit of a few weeks. Since you signed the contract eight months ago, you're probably out of luck. BUT, IT IS IMPOSSIBLE FOR ME TO KNOW WITHOUT SEEING YOUR CONTRACT.

If the financing contingency argument does not work, you may still have other options. Generally, the law will allow the builder to keep the earnest money in the event the buyer breaches the contract (even if it's not the buyer's fault). But, among other things, the amount of the earnest money deposit kept must be a reasonable estimate of the "damages" suffered by the builder. It's impossible to say without knowing more about your situation, but 15% seems a little high to me.

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Re: contract cancelation

It would be impossible and unprofessional to give an opinion on your contract and situation without knowing more facts and reviewing the contract in person. Your contract provisions will govern your rights. Also, you state you are paying 15% down, but later state you are getting 100% financing. Confusing.

Act quickly or you may lose out. If you are not able to complete the sale there may be another person who will assume your purchase and help you get your deposit refunded, or help you complete the sale on a partnership basis, or some other arrangement that will save you. See a real estate attorney right away.