What happens if there is an inconsistency in a real estate contract? Does it go to the Buyer or Sellers favor?

Question

I was the winning bidder on a home through an auction and the contract which I signed has an inconsistency.
Due to my circumstances changing I am considering walking away from the deal, but want to figure out my liability.
One the first page of the contract at the top it states
"See attached addendum C Terms & Conditions of Sale" BUT right under that in the General Terms & Conditions section there is a sentence that states:
"If payment of the balance of the purchase price does not take place within the specified period the deposit will be forfeited and the property will be resold at the risk and expense of the defaulting purchaser"
YET IN ADDENDUM C UNDER THE DEFAULT SECTION it says
"In the event the purchaser fails to close on or before the closing date, the Deposit may be retained by the Sellers as liquidated damages. The Sellers are not required to accept any back-up bid nor are they obligated to negotiate with any back-up bidder."
Which one is correct?

If my loss is limited to just the deposit I will walk away, but I see inconsistency and ambiguous statements to what happens if I walk away.

Lost deposit + difference. Another place just lost deposit

Answer 1

I'm not reading an inconsistent statements here. Neither of them look good for you. In the first statement: You lose your earnest money (deposit) should you not close within your due diligence period. It also gives you responsibility for any expense they incur remarketing and auctioning the property. In the second statement, they state that your deposit is "liquidated damages" (same as first statement) and that they are not required to take back up offers on the property.

Close on this or you'll have a mess on your hand. Unless you wrote in contingencies that side with you.

Answer 2

a long, but necessarily so, response:

both say essentially the same thing, which is that if you walk, your earnest money deposit and/or any other deposits you made to buy the real estate will be forfeited by you AND given to the seller.

the seller signed a contract to pay the auctioneer for selling its real estate. you contracted to buy it, therefore paying earnest money to secure your bid. others may have taken the contract instead of you, but you bid best and paid money to secure your bid. you promised to go through with the sale per the contract. earnest money secures your promises under all terms of the contract, not only to close in a timely fashion, per the timing inside of the contract.

under these addenda, it says that the seller may take your earnest money, which would then mean that from it, the broker-auctioneer would be paid.

you forfeit all you put up if you do not perform.

in my board, such language was approved by our attorneys--that the seller would retain the buyer's deposits as "liquidated damages," until too many time-wasting arguments ensued.

eventually we brokers agreed that since by law, we must retain earnest money unless both the buyer and seller agree upon the release of it to the buyer (usually with a commission paid out of it to the listing broker, but not always, which is terrible for us hard workers that made the deal happen anyhow, and honest, i am not crying, it is just true), we should instead go to the court for an adjudication as to the distribution of earnest monies. yes, we said, let us have a court of law determine what will happen to earnest money.

therefore, i think you should confer with your real estate attorney, since the listing broker-auctioneer may file an action called an "interpleader" with a court of law, which will then determine how your deposits will be handled.

all buyers should know that earnest money means that you are earnest in following through with the contract you entered into, to purchase the real estate.

a court of law will most likely side with the seller rather than with you. if you have no absolutely crucial reason to get out of the deal and you have tied up its marketing availability for a month or so, why shouldn't the seller keep the money? why then shouldn't the broker(s) that made the seller's sale happen be paid? they worked hard to help you and the seller come to terms.

the public has this strange conception of real estate brokers in that they believe that all of them are sitting around on their duffs all day long, just magically collecting commissions. their conception is often that we sell real estate parcels every day, like you go to the store to buy a loaf of bread. but the business is nothing like that and is highly stressful in that any deal can fold for good reason, and then we will never be paid even one dime for all the work and expenses we did, upfront, awaiting to be paid at the closing.

i wish that buyers (and sellers) would realize how crucial the signatures on an agreement to sell and a contract to buy really are. what you sign is a contract.

when a party to a CONTRACT decides not to perform, then that amounts to what courts call a "tort." a tort is a wrongful act. therefore, damages can be assessed against the wrongful party, which i think will be you.

my apologies for this long answer, but everyone really needs to realize these facts.

Answer 3

you dont want earnest money for a freelance to be binding. the earnest money is so the seller will see "good faith" in part of the customer. so if the customer backs out the seller will recieve the earnest deposit. searching on the scale of time between once you signed the settlement and at the same time as the seller reported they usual the different grant. in case you signed settlement the day previous and the subsequent day you get the deposit and they say that they took the availability then you actual ought to have an difficulty . the in effortless words aspect that the seller can do is settle for a again up grant from that individual in case you fall out. the seller ought to assert that they could promote the resources to the different shopper in case you didnt get them the deposit by technique of a particular date. frequently all this stuff will be reported interior the settlement. in case you signed a freelance retaining you've got the deposit by technique of tomorrow notwithstanding it took you 3 days then you actual breached settlement and they have the right to promote the resources to some different person. your realtor and his/her broking service may have extra archives on how the settlement replaced into written

Answer 4

Both...your deposit would be forfeited if you fail to close....and then the seller's can resell to someone else at your expense....I am not reading an inconsistent statement....You need to see a lawyer.

Answer 5

Inconsistancy or ambiguity in a contract will always negatively affect the writer of the contract. So it looks like you should come out ahead.