If you change your mind after submitting an offer to HUD and want to cancel your bid you should contact your bidding agent right away! He or she can withdraw your bid online as long as it’s taken care of BEFORE the bidding deadline for that particular Columbus HUD home. Your agent’s broker will also release your Earnest Money Check back to you.
Once a contract has been ratified by HUD, you will need to formally Cancel the Contract.
Your agent cannot release your Earnest Money without permission from HUD. There is a special form to download and request the Earnest Money back in writing. On this form, the agent must state the reason why you are not following through with your contract.
HUD specifies in its property disposition rules how they determine, whether they permit a refund of the earnest money or you forfeit your deposit after a contract cancellation on Columbus houses. Here are HUD’s rules:
1) Uninsurable (UI) Sales—The Purchaser forfeits 100% of the deposit for failure to close, regardless of reason.
2) Insurable (IN) Sales—The Purchaser forfeits 50% of the deposit for failure to close if the Purchaser is determined by HUD (or a Direct Endorsement Underwriter) to be an unacceptable buyer. The Purchaser forfeits 100%, if the sale fails to close for any other reason.
3) Vacant Lots—The required deposit is 50% of the sales price of the lot, and the Purchaser forfeits 100% of the deposit for failure to close.
Owner Occupant Purchasers
The entire deposit will be returned, if requested in writing within 15 days, with adequate documentation, if:
- There has been a death in the immediate family (Purchaser, spouse, or a child that resided in the same household);
- There has been a recent serious illness in the immediate family that has resulted in significant medical expenses or substantial income loss, adversely affecting the Purchaser’s financial ability to close the sale;
- There has been a loss of job by one of the primary breadwinners, or substantial loss of income through no fault of the Purchaser;
The Purchaser forfeits 100% of the deposit where no documentation is submitted, where the documentation fails to provide an acceptable cause for the Purchaser’s failure to close, or where documentation is not provided within a reasonable time following contract cancellation.
Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Realtors specializing in
HUD Homes, Shortsales, Investment Real Estate