I have 10,000 in earnest money on a real estate contract Buyer has not sold his home. Do I keep $$ if he bails

Question

The buyer did have to meet a finance contingency- which he did. The deal is not contingent on the sale of the home. His home is not sold. If he decides not to close, can he get his earnest money back in spite of the contract? Can he put a lien on my property and interfere with the sale of the home to another buyer?

Answer 1

It depends on the contract. When I put earnest money on a house, I always make it refundable.

If he decides not to close, that is his decision, it would be rare. Usually it would be his buyer that had to bail.

If you want out of the contract, why not refund his money and ask out?

Answer 2

The misconception that most people have in today's real estate market is that earnest money is required, and that it is non-refundable if the buyer pulls out of a deal due to circumstances not covered by contingencies in the agreement.

If it goes that far, courts usually refund the earnest money back to the buyer unless the seller can show that they were financially harmed in this transaction by the buyers decision to back out. (An example would be if the buyer made the sale contingent on the seller installing a swimming pool or such..)

As far as putting a lien on your home, no the buyer can not do so. But he can sue you for the return of the earnest money. Until this is resolved, you may not want to sign a sales agreement with someone else because the original buyer still has claim to the property, and you could be accused of trying to sell the same property to multiple buyers.

Answer 3

That depends upon the contract. It should specify how much can be retained as liquidated damages. Local laws and practices will come in to play as well. Consult with an attorney on that.

$10k is HUGE for earnest money; I never put up more than $500.

How could the buyer put a lien on your home?? If the deal falls through then there is no deal and no basis for a lien.

Answer 4

the full that technique of a contingency clause is the concept the grants of a freelance will be nullified if the shape stated because the contingency does no longer ensue previous to a particular date. as an social gathering - a skill customer procedures a seller and says "i will purchase your homestead for $a million million, and that i promise to furnish my million funds to you no later than June thirty first. even with the indisputable fact that, this furnish is CONTINGENT on the added journey that i need to promote my present day homestead earlier June thirty first." The settlement will then bypass on to outline that if the contingency does no longer ensue (the client has no longer offered his/her homestead through June thirty first), then the full settlement will be voidable through the client. this signifies that the client has the right to inform the seller that he/she is excercising their suitable lower than the settlement to cancel the deal. lower than those circumstances, the settlement will regularly extra state that if the deal is canceled through the skill customer because the contingency clause has failed - that the deposits will be again to the client and both activities will be again to their previous state - earlier the settlement develop into written. Many sellers are leary of contigency clauses, for precisely this reason. Contingencies create in simple terms this kind of uncertainty. A seller has taken his/her homestead off the marketplace and is now waiting to work out if the contigency will be satisfied. Given numerous supplies, one with a contigency, and one without, maximum realtors might want to probable propose the contingency-free settlement - assuming that the money develop into type of equivalent, for sure. That being suggested - if this settlement is what i think it should be - the client has an "out clause" in the shape that the contigency would not ensue - and that out clause is possibly coupled with a clause that states that the deposits will be again if the contigency does no longer ensue. Your in elementary words probable recourse is that the clause would not cover a topic the position the client did use his/her "perfect efforts" to ensure that the contigency develop into satisfied. in case you understand for a shown actuality that the client did not heavily attempt to promote their homestead, you've an challenge, if no longer - the client is possibly entitled to his/her earnest funds deposit again. P.S. definite, i understand there is not any such challenge as June thirty first. that's a hypothetical, like my social gathering!

Answer 5

Read the contract.