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Binding Contract
in that state of Virginia
We signed a preliminary contract to purchase a modular home from a retailer. We were told before the bank could order an appraisal, the bank needed a signed contract with our options. The appraisal of the land/home together is well below what we need to borrow. The bank denied our loan for lack of financing. In the contract there are no contingencies for financing approval. All it states is there is a 20% buyer's cancellation fee if we cancel. The home has not been ordered or even started building. Legally can they hold us to the contract and 20% ($200,000 contract price), even though we were told verbally we could back out if financing not in place? If we had 20% to pay for cancellation costs we would have no problem getting financing.
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Re: Binding Contract
Why in the world would you enter into a contract with no contingency for financing? I have no way of knowing if the seller will abide by the alleged oral agreement.
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Re: Binding Contract
We were advised by the bank and the retailer that the contract was not binding and it needed to be signed and didn't mean anything in order to obtain the apprasial for the home. We were told we could back out as long as we had not closed on the mortgage loan. Obvisouly we cannot prove the verbal conversation, but we are looking to see how valid this contract would be since we were orally mislead. We have been denied financing by the bank and can no longer buy the home, and we do not have the funds to pay 20% of $200,000 to this retailer who has not even ordered the home. The only work they have done is meet with us to pick out our options and floor plan.