Q: I was under contract to purchase a new home, but while I was waiting for the home to be built, my financial situation changed (due to illness).

Consequently, I told the builder I didn’t think I could still afford the home.

Instead of trying to work with me, the builder threatened me with lofty breach of contract fines. The builder then sent me a cancellation letter but I didn’t sign it because I was trying to seek alternative sources of funding.

Several weeks elapsed and I found alternative financing. When I returned to follow through with the purchase I was informed the home had been sold to another buyer and that my earnest money would be retained.

Do I have any ground for recourse? This transpired two weeks past the date in the contract that should have been our closing date. However, I never agreed to or signed a cancellation agreement?

A: So much of the answer to your query will come down to what the contract says that you signed. That’s why you need to find a real estate attorney who can read through the contract you signed and figure out whether the builder was right to take the house from you and keep your earnest money.

It’s possible that simply by calling the builder to tell him you had a financial problem and couldn’t close, your actions were deemed to be a breach of your contract obligations. Or, it’s possible that the builder was nervous that you’d run, and not wanting to be stuck with an empty house, jumped the gun and sold it out from under you. You’ll need to consult with a real estate attorney to determine what your rights are under these circumstances.

Your contract should provide language regarding the termination of the contract and what the builder can and cannot do with the earnest money. Please look at your contract and then discuss it with a qualified real estate attorney or litigator who specializes in new construction.

If you used an attorney to help you negotiate the contract with the builder, then you should call that person.