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If a Buyer has gone under contract to buy a house contingent upon receiving financing and they get denied for their loan, they must do the following: (1) terminate within the negotiated time frame, and (2) provide a “Loan Denial Letter” from their lender. However, there are very specific parameters as to what the Loan Denial Letter must reflect in order for the Buyer to actually terminate on this contingency and not default on the contract… and lose their Earnest Money or potentially be sued by the Seller for the default. These specifics are outlined very clearly in the Georgia Association of Realtors (GAR) Financing Contingency Exhibits as well as in the RE Forms Standard Terms. Watch the video for examples of Loan Denial Letters that do not meet the Buyer’s Financing Contingency.

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