I am selling a home and have a question about earnest money.
The buyer signed a contract on June 20, 2007, the closing date listed on the contract was July 31, 2007.
The buyer put down $1,000 earnest money, and paid a $100 option fee, and the home status was moved to option pending, ( so we had hardly any showings after that).
The home was appraised on July 12, 2007.
The home was inspected on July 20, 2007, and the inspector noted a few small repairs, all which could have been completed for under $500.
On July 24, 2007 the agent contacted my agent and said that they wanted to terminate the contract because they didn't want to wait on the repairs to be completed.
They are now requesting that we give them their $1000 earnest money back that the title company is holding.
Do we have to do this or should we be given these funds because we took our house off the market for this buyer and they backed out? What does the option period / $100 fee mean?
2007-08-21 15:30:46 · 4 answers · asked by MO 2 in Business & Finance ➔ Renting & Real Estate
The option fee is yours to keep.
The rest depends on what the contract says. If it is contingent on the inspection, and the problems are material matters (heat, electricity, plumbing, roof, safety issues) then they have an arguably good point. If they are cosmetic, or could be fixed easily, they are simply looking for a way to avoid the contract.
If they are right, they would probably win in court, and you should give them their money back. If they are just trying to avoid the contract, you would probably win and should keep it.
Offer them half. They'll probably take it.
2007-08-21 15:42:20 · answer #1 · answered by open4one 7 · 0⤊ 0⤋
I live in Houston and as far as I know the option money is for you to put the house as option pending and they have the right to get an inspection and cancel the contract if they are not happy with the results within the option period.
2007-08-22 01:26:46 · answer #2 · answered by Me 6 · 0⤊ 0⤋
It sounds like they werre looking for a way out, and are using the repairs as an excuse. Four days, and $500 worth of repairs, would not likely be considered as reasonable cause to terminate the contract. I wouldn't think they were entitled to their money back under these circumstances.
2007-08-21 22:39:57 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
As my lawyer told me when purchasing my last house "No one "breaks" a contract to buy a house, that is why they hire lawyers".
A decent lawyer will get them out of this if it goes to court.
2007-08-21 23:28:58 · answer #4 · answered by Bob 2 · 0⤊ 0⤋