Legal Question in Real Estate Law in Illinois

contract and loan approval letter question

Situation:

A FSBO seller has a signed contract on her home that was prepared by an attorney. The contract lists absolutely no contingencies (inspection, sale of home, financing, appraisal etc.) The seller also has an approval letter addressed to the buyers and signed by the bank's president. It states that the buyer is approved for the full amount of the loan.

Note: this is not a pre-approval letter. It says ''approval'', lists the property description, amount of loan, and is signed by the president of the bank. There are no contingencies or expiration date on the bank letter. As far as the seller knows, the buyer has that much money sitting in a checking account.

The buyers want out of the contract. The buyers are upset, realizing now that they didn't understand the contract they signed, nor did they understand what the letter from the bank meant.

Question 1: Can the buyers back out of this contract?

Question 2: Can the buyers force the bank to honor the loan based on the approval letter?

Note: The buyers are mentally healthy and were not forced to sign the contract.

The seller has never been a real estate agent, attorney, or held any other position that would influence the sale.

I am the seller.

1 Answer from Attorneys

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