Legal Question in Real Estate Law in Indiana

I want to know if I have the right to keep $3000 earnest money or to sue for damages. I signed a sales contract the end of July contingent on buyer obtaining preapproval for an FHA loan. The buyers obtained a preapproval which stated "cannot close until October 2010." We agreed to close no later than 15 November. Around mid October, we started asking when the appraisal was going to take place. The buyers agent told us everything was fine so we made an offer on a house the last week in October. November 15th they told us they could not get financing. By then we were out $1000 for loan application, inspection and gas to look at new homes. I also resigned from a part time job that paid about $400 per month because I thought we were leaving the area. I believe the buyers were turned down because a bankruptcy was involved. Should we receive an explanation from the mortgage company that issued the pre-approval letter? They should have caught this before giving pre-approval. Does the mortgage company share any liability?


Asked on 12/20/10, 6:15 pm

1 Answer from Attorneys

Your written agreement with the purchasers needs

to be reviewed by counsel.

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Answered on 12/29/10, 11:40 am


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