Eric Feichthaler

Dear Mr. Feichthaler,

I entered a contract to sell my house four weeks ago. The sale is contingent on the buyer obtaining financing. The contract says that they had to get loan approval within 30 days and inform me if they obtained approval. As of now, they have not, and the law firm handling the title work says they have not been informed of loan approval, either.

If they do not provide notice of the loan approval, can I cancel the deal? I have received two offers since that are higher than the sales price of this contract. Thank you.

— Randy N.

Dear Randy:

From your question, it sounds like you are using the standard Florida Bar approved “As-Is” contract, so I will assume this for purposes of answering your question. First, the deadlines (like any other contract term) are very important to know and adhere to. Any miss of deadline dates by either party could lead to a breach of contract, causing a deal to fall apart, loss of escrow deposits and other headaches. The standard contract provides that a buyer who seeks financing needs to inform the seller when they obtain loan approval, up to a certain date. In your case, that is 30 days from contract signing. If the buyer is not able to obtain approval in that timeframe, they are obligated to inform you, and they can cancel the deal. If they do not inform you, then they are deemed to have waived the financing contingency. This means they go forward as if it is a cash transaction. If they cannot finance, they are still obligated under the terms of the contract.

However, the standard contract also provides the seller options in this situation. Even if the contingency is deemed waived, the seller can terminate the contract within 3 days of the expiration of the loan approval date. Based on the facts as presented, you would be able to terminate the contract, return any escrow to the buyer and sign a contract with a new buyer.

Whether on the buying or selling side, it is vital that all terms of the contract are understood before signing, and that all deadlines are followed thereafter. All transactions are unique, so I do recommend you seek legal counsel on your rights relating to this contract.

Eric P. Feichthaler has lived in Cape Coral for over 33 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.