Q: I am a first time home buyer and not familiar with the process of buying a home. I put down earnest money before I knew whether or not I was approved for a home.

I went into a new construction sales office and the salesperson rushed me into putting down earnest money to hold a home. When I found out I was not approved for the loan, I sent the mortgage denial letter in to the sales office and I was told that I would receive my earnest money back.

It has been 3 months and I have yet to get back my money. I have made numerous calls to the sales office and no one returns them. Please help me by letting me know what steps I can take to get this matter resolved.

A: Do you know if you signed a contract to buy a home or just a reservation deposit? It sounds as though you did not use a real estate attorney to look over the documents you signed. If you had used a real estate attorney, he or she would have made sure that you were protected in case you were not approved for a loan.

I haven’t seen your documents, so I don’t know whether the reservation deposit form or the contract included a clause that permits you to withdraw or cancel the contract if you cannot get financing to purchase the property. It seems like you must have signed a contract to purchase the home.

The first thing you need to do is to read your contract to see whether the contract has a clause that would permit you to terminate the contract if you were unable to get financing. If the contract permits you to cancel or withdraw because you cannot get financing, and it requires the builder to give back your money to you, then at least you know you’re on the right track. Particularly if you followed the contract and delivered your notice to the seller of your inability to get financing.

Does the contract specify how quickly the funds must be returned? Does the builder have a finite amount of time to write you the check or must the funds be returned within 30, 60 or 90 days?

You may wish to hire a real estate attorney to go over your contract and help you assess the situation. If you’re entitled to get your money back, having an attorney write a letter to the builder should help shake the tree a bit. If the attorney cannot get your deposit back, you will have to sue the builder, which you might be able to do in small claims court.

Now let’s talk about you — being a first-time buyer doesn’t excuse you (or anyone else) from knowing everything you possibly can about the process of buying a home, financing a home, and closing on the purchase.

This is the single biggest purchase of your life and you went into it without an agent, without an attorney, without having read anything about the process, and without even knowing what you can afford to spend.

These are serious gaps in your knowledge base and you’re quite lucky something worse hasn’t happened to you.

I think all home buyers should take the time to really learn about the process of buying a home, as well as the obligations of homeownership. There are some wonderful books out on the subject (including some that I’ve written), as well as about 3 million real estate websites that provide information on the real estate industry.

I also think all first-time buyers should work with an agent (even if you’re buying new construction) because an experienced agent will help shield you from making the kind of rookie mistakes you’ve made.

Before you plunk down any more earnest money (and I hope you get yours back), please take the time to understand how the system works. You’re much more likely to have a good experience and find a home that truly meets your needs.

Good luck.

Jan. 19, 2009.