In many cases when you’re buying a condo or loft for sale in Downtown Los Angeles, you can get your earnest money back if you cancel the transaction… but in some cases, you can’t.
Here’s when you can.
When Can You Get Your Earnest Money Back?
First things first: Your Realtor(R) will build contingencies into your purchase offer that allow you to back out of the transaction under some circumstances. As long as those circumstances exist, you should be able to leave the deal without forfeiting your earnest money deposit – but every case is different, so if you’re thinking about canceling, talk to your agent first.
Here’s when you should be able to get your earnest money back:
- When the house appraises for less than you expect
- When your financing falls through
- When you find out the home has a big flaw
When the House Appraises for Less Than You Expect
When an appraisal comes in low, your lender is unlikely to give you the money for the house – but it may give you what it thinks it’s worth, based on the appraisal.
If the seller is unwilling to negotiate on price, but you can’t get the amount to buy the home that the seller wants, you should be able to walk away with your earnest money.
When Your Financing Falls Through
Nobody wants to be on the hook for buying a home when they don’t have the financing for it – and fortunately, your Realtor will build a financing contingency into your contract. That means you can cancel the transaction without losing the hefty earnest money deposit you put down.
When You Find Out the Home Has a Big Flaw
If the home has a major flaw that you just can’t work with (which will come out in the home inspection), you could be able to walk away from the deal and hang on to your earnest money deposit.
Are You Buying a Loft or Condo in DTLA?
Call us at 213-254-7626 or get in touch with us online to start exploring your options when you want to buy a loft or condo in downtown Los Angeles.
While you’re here, check out our: