After paying big deposits many customers who lost jobs because of the pandemic can’t qualify for mortgages to buy their dream homes.
When a builder denied a Kissimmee man his $15,000 deposit refund he called Action 9.
Consumer Investigator Todd Ulrich got results and tells us what new homebuyers need to know during the pandemic’s financial crisis.
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In the weeks and months ahead this issue could impact many buyers who’s financial situation has been turned upside down.
David Smith and family planned a big move next month after selling their home in Kissimmee. They were under contract to buy a new home in Windermere Isle from Beazer Homes.
“It was a beautiful house," Smith said. "My wife and I were really excited.”
But six weeks ago their new home dreams were crushed.
They knew selling their existing house during a pandemic -- and stay-at-home orders -- would be impossible.
“We can’t sell this house now because my wife and I are in our 60s, both high risk and my mother in law is 88 years old," Smith said. "We can’t allow anyone in the house.”
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Without selling David, said he can’t qualify for his new home mortgage.
He contacted Beazer Homes and asked to cancel then requested his $15,000 deposit refund.
In a written response Beazer Homes told David it was not obligated to refund his earnest money.
"They said they would cancel the contract but they would keep the deposit."
He asked his realtor for help and called Action 9.
We found new home contracts may not contain a financial contingency clause standard in existing home resales.
The contingency would require a deposit refunds if a mortgage is denied by the lender.
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Ulrich reached local Beazer managers who reviewed David’s complaint, and called it a miscommunication. They said in these extreme times, David would now get a full refund.
A big relief for a local family who felt they lost thousands of dollars and a new home.
Real estate experts say you should keep the lines of communication open with your builder.
Be prepared to show your lender that you can no longer have mortgage approval because of changing financial conditions.
And if you’re buying a new home now make sure the contract includes a financing contingency that gives you a way out.