Can I Get Out of a Home Purchase if I Do Not Get a Loan?

In a number of older contracts for home purchases we have seen, the Buyers’ obligation to close was conditioned upon their ability to get a loan. In the contract forms most commonly seen today, however, Buyers only have a certain number of days to secure financing (get a loan), after which they are obligated to close, even if the lender does not finance the purchase.

What happens If I don't get a loan?

What happens If I don’t get a loan?

As you can imagine, this puts Buyers in a very difficult position. On one hand, Buyers may get something from their lender called an “Approval” or “Commitment.” That document, however, is not a firm commitment from their lender, and will likely be subject to a number of conditions that need to be satisfied prior to the lender funding the deal. In most cases, it is unlikely that Buyers will be able to satisfy all these conditions prior to the loan contingency deadline. For more information on the loan contingency deadline, read this previous post.

Obviously most Buyers do not have the ability to purchase a home without the help of a loan.


Here are a few of the possible outcomes Buyers could face if their lender does not ultimately provide financing:

  • The Sellers could grant the Buyers additional time to secure financing.
  • The Sellers could agree to finance all or part of the loan, if that would satisfy the institutional lender. (See this post for more information on Seller-Take Back Financing.)
  • The Sellers could hold Buyers in breach and sue for damages.
  • The Sellers could attempt to force the Buyer to purchase the home. Although we have seen Sellers and their legal counsel threaten this, most of the contract forms we see do not give them this right. Even if the contract contains such terms, we do not know if these terms would be enforceable in a Missouri court. (For more information, read this previous post on Seller’s remedies.)
  • The Sellers could agree to keep the Buyers earnest money and let them out of the contract. In the event there is not much earnest money, the Sellers may require the Buyers to pay an additional amount.

If you have questions about your loan, or the loan contingency deadline in your contract, please contact us at 314.862.2237 or at

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