There are still plenty of people losing their jobs. So, if you lose your job and you are under contract to purchase a home, what happens?

First of all, don't panic. There are several options that may allow you to exit the contract without penalty, if that's what you want or need to do.

But first, consider having your agent talk to the seller's agent and discuss the possibility of delaying closing to give you some time to search for a new job. This doesn't always work, but if the sellers have the ability to be flexible and you believe your prospects of securing new employment are good, it's worth a try.

Now let's look at your options for getting out of the contract if that's what you need to do.

Hopefully, the contract was written with a financing contingency. This allows you an out if the lender will not give you a mortgage to buy the house. The financing contingency, like all contingencies, has a specified number of days in which you can exercise this option to get out of the contract. Hopefully, this contingency has not been removed when you lose your job. If this is still open, a letter from your lender declining your application, along with an explanation of your job situation should be enough to release you from the contract. Because there is no default, hopefully the sellers will sign the release and agree to release your earnest money deposit. But remember that this is never automatic.

As a buyer there are typically several additional "outs" in a contract. One of them is the home and/or radon inspections. If those have not yet been done you can use those as a reason for withdrawing from the contract.

And, if this is in a Homeowners's Association, you may be able to use the three days you have to review the HOA documents as another out.

If it's late in the game and you're close to settlement, it is possible that none of these options may be available. At that point, your agent should immediately talk to the seller's agent and lay out the situation. I'd like to think that people of good will could work something reasonable out. Hopefully, you can even still get your earnest money deposit back.

But better to lose that money than to buy a house you already know you can't afford!

Since buyers seem to be coming out of the woodwork these last few weeks, it seems like a good time to talk about that important moment when you've found the right house, wrote a great offer and now wait in suspended animation for something to happen!

So, what, exactly happens after you wave your good-byes to the real estate agent and walk out of their office? Here's how things typically proceed in our area.

First of all, in addition to the offer, you'll have written a check made out to the broker who is representing you. That check is called an earnest money deposit. That check stays with your agent until you have a ratified contract. At that point it will get deposited in an escrow account where it will remain at settlement.

Now the agent will fax or e-mail the offer to the listing agent. Your agent will then follow up by phone to make sure tha that the offer arrived and to find out when the offer will be presented to the sellers.

Since the offer states that "time is of the essence" the offer should be presented as soon as reasonably possible. Within 24 hours is usually workable. There may be special circumstances, especially now, with so many sellers having already vacated their homes. And, in some instances the presenting of the offer will take place via phone, fax and/or e-mail.

The sellers will decide to either accept your offer, counter your offer, or reject your offer. Let's assume they may want to sleep on it, but typically, you should have an answer within 24 to 48 hours.

If they accept your offer, then you're going to begin the process of executing that contract, proceeding to loan application, inspections, etc.

If they counter your offer the ball is back in your court again and you need to decide how to respond. Again, remember that "time is of the essence". It makes sense to have thought through likely counter offers when you write the original offer so that you can be prepared to make some quick decisions.

If they reject your offer, in my opinion, in this market, they don't really want to sell their home and shouldn't have it on the market. No matter how bad an offer is right now, sensible sellers will counter it. It's hard to negotiate without an offer on the table! And, no offer means no sale!

If they reject your offer with absolutely no negotiation you should keep looking!

Ultimately, hopefully, you end up with a ratified contract. A contract is ratified when every party to the contract has agreed to every provision, including all changes. At that point all the "i's" are dotted and the "t's" are crossed.  It's now a legally binding document! Congratulations!

When someone finds a home they want to buy, but hasn't yet sold theirs, they will sometimes submit an offer with a home sale contingency clause. What this says is that they will buy the home after their home is sold. It provides a number of days in which the home must sell as well as the number of days before it will be on the market. It also contains a "kickout clause" stating that if another offer comes in they will have a defined period of time to remove that contingency or lose the contract on the house.

A contract with a home sale contingency is fairly unattractive to most sellers these days. For one thing, they know the market has been slower. It is likely to take the prospective buyer longer to sell their home as well. And, during that period, their home is less visible to other potential buyers who may not have a home to sell.

Now that should not be the case. But the world doesn't always work the way it should! There are quite a few agents who won't even show listings that are under contract with a home sale contingency, even though there is a kickout clause and they could get the house. There will always be agents looking to simplify their jobs and in their minds they see no reason to show these homes when there are plenty of homes out there without any kind of contract on them.

But that's not really what I wanted to share with you today! I recently received an offer on one of my listings with a home sale contingency. My sellers were willing to consider it except for one fatal flaw in the offer. The home offer was contingent on the sale of a home that the prospective buyers didn't own. This would seem to not require explanation, but you can not contractually commit to sell a home you don't own!

The defense by the agent who wrote the offer was that the home was owned by the parents of the wife. Again, it doesn't matter who owns the house! If the buyers don't, they can't legally agree that someone else has to sell their house!

Now there are legitimate ways in which this situation could have been handled. You could add the parents as parties to the contract to purchase the next home. Or, you could attach a notarized letter from the owner of the home saying that they were selling and that the proceeds would be available as a downpayment on the home that the buyers were purchasing. In that situation I'd also want to see a letter from the lender that they were aware of where the funds were coming from.

So, if you're living in a house owned by Mom & Dad and they're willing to sell it and give you the proceeds to buy a home of your own, just be aware of the extra steps that will be necessary from a paperwork perspective. And, if you have an agent who doesn't understand that you can't commit to selling someone else's home you may want to rethink how qualified they are to help with this purchase!