am i entitled to the escrow deposit or the actual cost of out of pocket when buyer did not perform?

Question

Opend escrow on my condo. on 3/8 and close of escrow was to be 3/26. all contengencies to be removed with in 17 days. I paid $575 for termite and clearance. $250 hoa documents $100 for hazard report . the condos occupancy is at 50%. the buyer was getting 100% financing with no income documentation. they were not able to get loan with their first lender because of occupancy . I found out that the other loans did not go through because of the buyer's employment and not being able to provide bank statements. . During this whole time the buyer's agent was telling me that everything was ok and we will be getting loan docs any day. This went on for about 45 days. At that time i sent out the notice to performe the buyer's agent . when I did not hear back from the agent I asked escrow to prepare cancellation notice and send me the escrow deposit. Am I entitled to deposit or the actual out of pocket expenses listed above?I am the seller/broker but not experienced.
Thanks

Answer 1

Since the reason the sale fell through is due to the Buyer's financing you probably aren't able to keep their deposit. Any Buyer's Agent worth their salt will have made the contract contingent on financing. As long as the Buyer is able to produce documentation that they were turned down for the loan they get their deposit back.

Talk to a real estate attorney to be sure but you probably won't get anything but experience out of this transaction.

Answer 2

The answer(s) lie(s) within the sales documents. A deposit is made as an expression of earnesty. If the sale did not go thru then the documents will outline how the deposit should be handled.

Without knowing the basics, the items which you paid for and which are of value to you are prob. at your expense since you can re-use those with the next sale. (Haz. report, termite, etc..) Housing documents might be at the expense of the buyer and could be deducted from the deposit.

BUT.. if you deposit was accepted as refundable (vs. non-refundable) then you have to return that portion which is not encumbered by expenses which you paid on behalf of that sale and which you can not reasonably expect to use again.

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Answer 3

It should be in your sales agreement how escrow is distributed if the sale fails and if you are entitled to receive any out of pocket expenses. If your agreement doesn't address the out of pocket expenses, you may have to file a small claims against the buyer to recoup your losses.

Answer 4

You are only entitled to the escrow deposit. Sorry

Answer 5

I know the buyer forfeits the escrow but I don't know who gets it.