WHAT HAPPENS TO MY DOWN PAYMENT IF THE SALE FALLS APART?

There are several scenarios in which a buyer may get their contract deposit refunded without penalty.

• If a contract is conditioned upon the buyer obtaining a mortgage and the bank’s appraisal comes in significantly under the purchase price, it is possible the bank will not loan the amount specified in the contract. Assuming there is a mortgage contingency in the contract, the buyer can get their contract deposit refunded.

• If a contract is contingent upon the buyer obtaining a mortgage and the buyer’s loan is declined by the bank, the buyer will generally get their contract deposit returned.

• If a co-op board rejects a buyer’s application, the buyer can get their contract deposit refunded, provided the buyer applied in complete good faith – nothing has been falsified, misrepresented or willfully excluded.

• If the co-op board issues a conditional approval (i.e., Insisting that the buyer deposit 1- or 2-years’ worth of maintenance in escrow as security), the buyer can back out and get their contract deposit refunded.

• If a co-op board has not issued its decision by a specified date, the buyer can get their contract deposit refunded.