If a buyer provides a pre-approval letter with the offer to purchase, but finds out later that financing can not be secured what happens to the Purchase and Sale Agreement?
Most buyers make their offer contingent upon securing a loan, and if the seller is notified in writing from the buyer’s lender that financing is not possible the contract may be terminated. If the buyer notifies all parties of the inability to secure financing on or before the financing contingency period expires customarily the buyer is entitled to a refund of the earnest money from the broker holding the funds in escrow.
