The Good-faith Deposit - Buyer Back Out.
I have an escrow open for nearly three week. The buyer decided to back out for no reason after I finished the repair he requested. Do I have the right to keep his deposit money? TIA.
Sam
BTW, I live in California and used Purchase agreement from the realtor.
Sam
What does your contract say. Did the contingency period expire according to your contract?
If the Buyer intitials the Liquidated Damage Clause of the Residential Purchase Agreement, then you have the right to keep the deposit, up to 3% of the sale price.
I'm suprise your Sellers Agent did not inform you of this, for your agent will recieve a portion of that deposit too.
Hope that helps.
Liquidated Damages Clause limits what the buyer wil need to pay in case they default, but in order for the seller to keep deposit money, the contingency has to expire. Just initialing Liquidated Damages Clause is not enough.
Also, Realtors in California do not receive any portion of buyers deposit, I have never seen that happen.