FACTS: The buyer submitted to the seller a notice of inability to obtain loan approval pursuant to Section 2(b) of the AAR Residential Resale Real Estate Purchase Contract.  The seller does not believe that the buyer made a good faith effort to obtain the loan to purchase the property. 

ISSUE: What are the seller’s options if the seller does not believe that the buyer made a good faith effort to obtain loan approval to purchase the property? 

ANSWER: See discussion.

DISCUSSION:

If the seller believes that the buyer obtained loan approval or that the buyer failed to make a diligent and good faith effort to obtain loan approval, the seller should contest the notice in writing.  If the buyer does not produce evidence of the inability to obtain loan approval after a good faith effort that is satisfactory to the seller, the seller can initiate mediation to resolve the dispute.