How do I get my Earnest Money back??

Question

I want to get my earnest money back, and I want ALL OF IT !! I made an offer on a house with the intentions of living in it not rehabbing it. The offer was accepted, and we had the home inspected. There are a lot of things wrong with the house. It costs more money to repair these things than I can afford, and besides I'd rather buy something worth the money I would have to spend, rrather than put money into the house for major things. The house needs new windows, tuckpointing all around and a new roof. Here is a letter I wrote to the seller, tell me what u think. HELP !!!!


All these problems need to be remedied before this transaction can go any further. If the issues are not addressed we will continue on our search for a home.



FURNACE

The furnace/central air needs to be properly and completely installed and functioning. The furnace needs a shut off valve, and a plastic exhaust pipe. Debris in the "clean out" area at the base of the chimney should be removed as part of system service.



PLUMBING

The old steel piping is subject to corrosion on the interior of the pipe. As corrosion builds up, the inside diameter of the pipe becomes constricted, resulting in a loss of water pressure. This piping is typically replaced when the loss of pressure can no longer be tolerated.



ELECTRICAL

Extension cords should not be used as permanent wiring. This wiring should be removed through out the house. Poor connections between newer wiring and the old-knob-and-tube wiring were observed. All connections of this type should be performed within junction boxes, fitted with cover plates.

The installation of a ground fault circuit interrupter (GFCI) is required in the kitchen and bathroom. GFCI offers increased protection from shock or electrocution.



STRUCTURE

Evidence of termite damage was observed and there is risk of additional hidden damage since termites can do a substantial amount of damage. If the property hasn't already been treated, a licensed pest control specialist should be engaged to eliminate further termite activity within the home. All damaged wood should be repaired or replaced.



ROOFING

The downspout should discharge water at least 5 feet from the house. Storm water should be encouraged to flow away from the building at the point of discharged. Install downspout at left rear section of house.



Stairs leading to basement need hand rails. Drop ceiling in same area needs to be repaired.

The fireplace needs a damper.

All appliances must stay.

Answer 1

Well did you make your offer based on it passing inspection or your obtaining financing? Those are two very common terms when putting down earnest money.

Did you understand what Earnest Money was?

The earnest money is an amount of money that the buyer puts up to show he or she is serious about purchasing the property. The money represents the buyer's commitment to buy and acts as an unofficial option on the property. After receiving an earnest money check, the seller will usually stop showing the property, and wait to see if the buyer can get a mortgage.

Earnest money is important to the transaction because it shows the seller that the buyer is operating in good faith (hence the name, "earnest"). The bigger the deposit, the more reassuring it is to the seller, who thinks, "This buyer is serious.'' It also ties the buyer to the property and keeps him or her from looking for additional properties.

When Do I Get The Earnest Money Back?

If the sale goes through, the earnest money is used as part of the cash down payment and is paid to the seller. If the sale does not go through because of a reason covered by a contingency in the contract (if, for example, the buyer could not get a mortgage), the seller should sign a release of escrow and the earnest money will be refunded to the buyer. The earnest money should also be refunded to the buyer if the sale does not go through because of a problem on the seller's side. If, however, the buyer backs out of the deal for no reason at all, or for a reason that is not covered by a contingency, return of the earnest money may go to the seller.

FSBO (For Sale By Owner) Earnest Money

If negotiating directly with the seller without the assistance of a Realtor®, never give the earnest money directly to the seller. If you are dealing with a for-sale-by-owner seller who insists upon earnest money before a contract can be executed, write the check to their lawyer or closing attorney or your lawyer or closing attorney, and write fiduciary agent after the lawyers name. This money will then go into a trust, or escrow, account until the negotiations are completed, the contract signed, and all contingencies met. If the deal falls apart, you'll get it back. But if you give the earnest money directly to the seller, you may never see it again, or you may have to go to court to get it back.

Good Luck to you.

Answer 2

Getting Earnest Money Back

Answer 3

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RE:
How do I get my Earnest Money back??
I want to get my earnest money back, and I want ALL OF IT !! I made an offer on a house with the intentions of living in it not rehabbing it. The offer was accepted, and we had the home inspected. There are a lot of things wrong with the house. It costs more money to repair these things than I can...

Answer 4

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Answer 5

You have the house inspected 'First' then you make an offer. And as far as earnest money goes...'One' dollar will hold a house.
You took the house when you gave the owner the money. The owner lost other sales because he had stopped selling the house because he felt it was sold to you.
You should talk to a real estate person to follow the right protocol. Then talk to home owners to find how they did things.

Answer 6

Okay, you need a lawyer to handle this for you.

First comes the examination of the contract.

You may have two contingencies that will get you out. If you don't, you can blame the realtor that gave you the contract.

First is the inspection contingency. Normal way to handle these is to adjust the price.

Second is the mortgage contingency. These defects may cause the appraisal to be too low to get the loan as specified in the contingency.

You need to be sure you're meeting your deadlines and the sellers are put on notice. There are hurdles to jump through to get the deposit back, it is not self-executing.

Oh, by the way. Just because it doesn't have an inspection contingency, that doesn't mean it isn't contingent on the house being what you think it is. If you thought it was one thing, and the inspection shows it is something else, but the contract doesn't say "AS IS", there's no meeting of the minds. Seller was selling one thing, you were buying another. Only after the inspection do you both know just what the house is.

Answer 7

Look at your contract - there should be a clause regarding the house packing a home inspection, and also one regarding the ability to float a mortgage. Failing the home inspection gets you out of both of these.

If you paid by personal check, put a stop payment on the check, and if it's within 30 days, you'll get your money back - you'll pay $30 to do the stop payment, well worth the effort.

If you still want the house, give them this list and a time frame to complete (<30 days), and send them a cancellation letter, registered return mail, with a copy of the home inspection report.

Answer 8

Hi, my name is Eunice Saunders and I am a Real Estate Agent. The answer to your question lies in the the "offer to purchase and contract" that you have signed with the buyer. If you had a good Agent or an Attorney help you to put the contract together it should have a clause for this type of situation. You can rescind your contract even if the clause is not in there though. It may cost you the earnest money to get out of the deal if you do not have a good reason to back out. I would suggest you speak to your Agent and a good Real Estate Lawyer. Either way this has cost you some money as you will have to pay for whatever inspections and appraisals that you have ordered for this property. Most of the time a seller will let you out gracefully if you want out so just find out what is in your contract and gracefully request to bow out of the deal. Be as nice as you can, cause being ugly will only make matters worse for you. Good Luck! Eunice

Answer 9

Well... it depends on what you signed. I always put in a clause that the contract is contingent on passing an inspection by xyz inspector. The inspector can be a friend knowledgeable about buildings, that will fail the inspection if you tell you changed your mind.

Also, usually there is a clause in the contract that stipulates that the building must also pass the inspection by someone sent by the lending institution.

Finally, always have a lawyer read *all* documents. Every real estate person I have bought or sold through found new and creative ways to rip me off. Having a lawyer read everything would have prevented that.

Answer 10

If you made the offer contingent on a satisfactory inspection the use the contingency. Although from the tone of your post it doesn't sound like you did. What does your agent say?

Answer 11

Yikes, looks like you copied the inspection report on your letter.
In any event first of all you should have terms within your offer to purchase to address the issue of "subject to inspection" and the terms that would allow you to terminate your offer. Second you with your agent should have looked at the Seller's property condition report to ascertain the language that you should have placed in the "subject to inspection" paragraph. The preparation of the subject to clause should have been done by your agent with your assistance. Hopefully it was.
Lastly, simply ask your agent to prepare a termination agreement and bring it to you. See what the termination agreement says before you sign it regarding your deposit. It might be that you are reacting to something that might not happen and you will get your deposit back in full.
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