Deposit Refund

[osryd]

Hello,

My fiance and I fell in love with a home in Pennsylvania through the builder Ryan Homes in Fox Run Estates. We decided we wanted to purchase the home and started a payment plan where we paid in increments to reach the 5% needed to start the ground breaking. My fiance already owns a home here in NJ and put the house on the market. We were approved for the mortgage through the builder's Mortgage company. They approved us on what they called a "worse case scenario" meaning that if we did not sell our current home we would still get a mortgage if we were able to rent it out at the rate they decided($1500). When we received the approval papers we did not sign them and agree to those terms because the rental amount they came up with was too high for the area and the state of the current market. Prior to the mortgage approval we signed the contract. We asked the sales agent that if anything came up or if for any reason we were not able to purchase the home would we get out money back. She responded "In all my years of working with Ryan Homes I have never seen them keep someone's deposit. They always give it back because they don't want the bad press." We asked her the same question again after we signed the contract and she would even give us examples of when Ryan Homes refunded deposits. However, we did not get that in writing and now are in contract. After reviewing the contract it had a clause that allowed for verbal statements to be included but "none" was typed there. I was not aware of this. After investing approximately $11,000 we decided we could not afford to purchase the home. Our jobs were not secure and we were financially tapped out and starting to become delinquent on current bills due to paying for the new home. We did not want to but we had to back out of the contract. Ryan Homes will not refund our money. I spoke to the agent that assured us we would get a refund and she said that it was nothing she could do. Also, Ryan Homes has not started the home. There was no ground breaking and they did not build anything. I know that we are legally responsible for what we signed and agreed to but do you have any advice for recourse? I am not trying to go at this in a threatening way. I want to appeal to them to have mercy on us. That is all of our savings and we really cannot afford to lose all of that money. Thank you for any advice you can offer.

[ennis]

Hi JEWEL--

Thank you for posing your question with full details; so many times questions submitted to me are so sketchy that I can't be sure I've got enough information to provide a valid answer! Your question is not only fully informative, but well-written & easily understood!  Here's my reply:

First, get a Letter from a local Property Management(PM) Company that indicates the Fair Market Rent that can be expected from the leasing out of your current home--it should indicate an amount lesser than the $1500 that your "worst case scenario" loan approval states! With the PM's Rent estimate in hand, I think, you should make an appointment with the Managing Broker of the Real Estate Company that the Sales Agent works for.Explain to him/her your situation,show the letter from the PM, tell about the apparently inaccurate advice/guidance given you by the Sales Agent--for whom that Managing Broker is responsible--and request his/her assistance in receiving  a refund from Ryan Homes. Gently advise him/her that the reputation of his/her Real Estate Company--as well as that of Ryan Homes--is at stake. Let the Broker know that if you lose your $11,000 life savings because of the misinformation provided by the Sales Agent you'll have no qualms about informing the local Association of Realtors, Multiple Listing Service and the Media of such "malpractice!" Speak softly, be courteous, but let the Broker know that you are very serous about getting a refund!

Also meet with the Loan Officer(LO) that granted you the "worst case scenario"(wsc)approval & provide the LO with a copy of the PM's statement of estimated rents(at less than the $1500) and request a "Letter of Denial" of the loan based on the inability of the property to provide you with sufficient monthly income as presented in the "wcs" approval.If the LO is unwilling, speak to the Manager & seek his/her assistance! Let the Mortgage people know that you're serious, and will submit an inquiry to the State's Dept. of Financial Institutions(It may be called something else in PA or NJ, but every state has an agency that provides "oversight" to Banks, Credit Unions, Mortgage Companies, etc.)if they won't assist you!

Last but not least, meet with Ryan Home's Foreman for Fox Run Estates and directly present your request for refund to him/her! Hopefully, you'll have a letter from the PM on inadequate rents, perhaps a letter from the Real Estate Broker/Agent and a Loan Denial Letter from the LO or his/her Manager! Again, gently--quitely--with courtesy, let the Builder/Foreman know that you must get your $11,000 back or you will do your best to involve the Association of Realtors, Multiple Listing Service, the Department of Financial Institutions and--yes, even the State Agency that controls the License, bonding & insurance requirements of General Contractors like Ryan Homes!

But before you take this approach to having Ryan Homes "do the right thing",you should seek the help of an Attorney who specializes in Real Estate and/or Financial Laws. As "time is of the essence" in Real Estate matters,I urge you to consult with a Lawyer ASAP to obtain a legal opinion of your contractual obligations & to further inform you of options and actions that may result in the desired refund!(If you can't afford to consult with an Attorney, contact your local Bar Association for help with a "Pro Bono") Jewel, I hope that you are able to reclaim your $11,000. While talking to the Realtors, Lenders, Builders about this,in addition to the "threats," let them know that if you do get your refund, you will not only use their services later, but will refer them to your family, friends & co-workers!

Let me know how this works out for you, will you? GOOD LUCK.

--JIM