Earnest Deposit Money

Comments(8)

• 
  Vern9th July, 2003

  I tell you what I think about earnest money. If they can not complete the deal and you wish to keep the earnest money, here what can happen to you. Well they can take you to court and tie up you property in court while you settle this issue. Now you can not put the property under contract to anyone else while the property is tied up in court. Well think about it, you may very well win the court case, but look how long you property has been off the market due to the courts.

• 
  verne_j9th July, 2003

  What I'm trying to get at is.....
  
  This is a real life situation.
  worse case scenario, the client that gave the deposit to 3rd party or escrow, say for whatever reason dont get the house,
  They have to return the deposit to the client correct???
  
  Verne

• 
  BAMZ10th July, 2003

  Hi Vern,
  
  You will need to read the purchase agreement. If it is a standard mls agreement, there are many clauses that will allow a buyer to escape, but they may have to follow through with the instuctions of the agreement on how to get the money back. A friend of mine just made a quick decision to buy a house without thinking about it, and the next day he wanted out, so he called me. In this purchase agreement, one of the escape clauses was that if the buyer could not get funding the contract was terminated and the earnest money refunded. However the contract stated that their must be proof (written letter from mortgage co) that the buyer can not get financing for one reason or another.
  
  The best that I can tell you is to find the escape clause that makes the most sense for the situation and follow through with it. It still may take 7-10 days for the money to be released from escrow.
  
  Best of Success!
  
  BAMZ

• 
  hibby7610th July, 2003

  I make all my offers subject to partner approval by (date) and subject to aproval on inspection as well as a funding clause.
  
  I rarely offer earnest money. Realtors say you NEED TO or at least should, but they're looking out for their interests. If you can prove that you're capable, competent, and going to close they won't require earnest money.

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  gbp10th July, 2003

  In California, if buyer defaults they can lose all their deposit and may pay up to 3% of the sales price. Yes, there are many clauses that allows buyer to cancel, however, the buyer must adhere to all time frames mentioned in the purchase agreement in order to get their deposit back.
  
  If seller decides not to release the deposit without just cause (vindictive), then seller can be fined $1000 in addition to having to give back the full earnest deposit.
  
  My wife's an agent.

• 
  Vern10th July, 2003

  Hello Verne_J,
  
  There is some really good information given here however, I am not sure your question got answered. I the information in all these responses is correct. I was only saying that if it is your property that the buy defaulted on and you wish to keep their money because there reason was not just, this person can tie you up in court and you wind up losing more than what the deposit was worth. Now on the other hand it is you and you want to get your money back and you have no just cause for backing out of the deal, well you still can tell the seller that you will take them to court and tie the property up for the next few months if yo do not get your money back ASAP. This is a little under handed, but....... . I would never attempt to keep someone money because they changed their mind. I always allow others to put in an offer just in case the first person defaults on the deal. I just tell the second person that it is yours if the first offer does not go through. I hope this helps. Good luck

• 
  verne_j10th July, 2003

  Thanks for all the replies.
  
  I appreciate it.
  
  I havent read to fine print but the "question" is about family members buying a house and worst case scenario they dont get the house, they should get the deposit back.
  
  Verne

• 
  molarband27th August, 2005

  I recently posted a very similar situation where we backed out of the deal because of financing issues.
  
  The seller at first refused to return my earnest money. I threatened to file a Lis Pendens and complain to the Real Estate Commission. A Lis Penden supposedly will prevent the house from being sold again.
  
  Last I heard, the sellers released the earnest money. Now I am just waiting for the escrow company to mail me back my earnest money.