Question: The contract provided that the Conditional
Loan Approval would be furnished to the buyer within ten days
after acceptance of the contract. The buyer failed to deliver
this Conditional Loan Approval within the ten-day time period.
The seller wants to cancel the contract. Can the seller cancel
the contract because the buyer failed to deliver the Conditional
Loan Approval within the agreed ten-day period?
Answer: No. If the buyer fails to timely deliver a Conditional
Loan Approval to the seller, the seller has two options under
Lines 56-59 of the Contract. One, do nothing and wait until closing
to see if the buyer qualifies for financing. Two, deliver a notice
to the buyer requiring a Conditional Loan Approval within five
days. If the Conditional Loan Approval is not delivered to the
escrow company by the buyer within five days, the contract is
cancelled and the buyer receives the return of the earnest money.
