Posted on 10/17/2014 3:10:49 PM PDT by TurboZamboni
had some maroon claim he was buying a house and then he disappears.
our realtor says we'll never get the earnest money because it's all just a theoretical thing everyone puts on paper but nobody ever gets because it usually costs more money persuing it than the amount of the money is.
anyone know how to stop the Craigslist-type driveby morons from doing this ?
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Did you have a fully signed contract (including initialed changes)? Signed, sealed and delivered, as they say?
Only thing you can do is make sure to get a certified check at the time the purchaser signs the contract.
yeah.
I’m told it’s in all standard real estate contracts.
(but is never enforced)
We were told not to bother pursuing non-insured damages to our car either.
We sued the little twerp in small claims court, garnished his wages, and got every penny back plus court costs. It was nearly 1000 dollars.
We just got the last of the money a few weeks ago. No one is more shocked than that moron that we got our money back.
I say, sue the jerk you’re dealing with, if you have his real name and info. Small claims court is no big deal. We are glad we did it.
Are you sure the potential buyer didn't pay earnest money, rather than him having paid earnest money and the broker having pocketed it?
In the future, you should tell the broker that if the buyer does not hand over earnest money at contract signing, then there is no contract signing.
Theoretically, the earnest money is yours if the buyer backs out for no sound reason. I have never heard of anyone keeping the earnest money, though. If I were you, I would simply rescind the acceptance of the buyer’s offer under the grounds that they abandoned the deal and relist the house.
The only way you can keep the earnest money is if the buyer agrees or you sue (hopefully small claims court). On the other hand the only way the buyer can get the earnest money back is if the seller agrees or the buyer sues the seller.
That is true in some states, but since real property (land) is decided by the "contract law" of that state each state has different outcomes. My Brother-in-law had a house contract fall through and the real estate agent just mailed him the earnest money and put his house back on the market.
Hm. I used my closing attorney as an escrow agent. The buyer gave the earnest money to the attorney.
Calif version
Earnest money was historically 3%. As prices greatly increased 1% is now common.
If the buyer backs out of the deal, the escrow company could claim expenses, say a few hundred or so.
The company we use does not do that.
If you back out for a contingency, can’t get the loan, don’t accept the condition of the house, etc. you should get your deposit refunded.
If you have removed the contingencies, the buyer may forfeit the deposit to the seller.
If there is a dispute about the refund, then mediation is usually the first step.
12 years never had a dispute.
I have had seller’s agents try to restrict time frames etc. seemingly to trap the buyer into forfeiting the deposit. A good buyer’s agent will protect your deposit and not let it be forfeited. In cal you can’t claim the deposit as a seller if you don’t send the buyer a notice to perform and give 24 hours for them to complete a task.
Most of the time, I’ve had despot at risk, my clients took the risk on their own against my advise. But the deals closed anyway.
Most sellers will be flexible deep into escrow to add time to contingencies etc. on order to get the deal done.
I’ve had one insist on time frames and my buyer backed-out and took deposit. The seller who insisted on a condition had to put the house back on he market.
Sometimes people out smart themselves.
In Cal if the buyers real or receives the deposit check they must set up a trust fund. Trust funds are audited by the state every year.
We have the buyer give or mail the cheek directly to the escrow company. Most escrow companies will not open escrow until they have the check in hand.
Are you in the east or do you just always use an attorney?
I know the original colonies use attorneys and not escrow companies.
If your realtor actually received the earnest money it should show in his trust account. Ask to see the receipt of the earnest money. If he refuses to show you, go to the local Board of Realtors. If you had a signed accepted contract, the earnest money could not be released without your permission.
Please, a little more detail. Did the buyer give an earnest deposit to the Realtor upon the signing and your acceptance of an offer? Were all the terms and conditions of the contract met, on your part. Did the buyer make a diligent attempt to meet his contractual obligations? Did you sign a release of contract? Is the Realtor representing you or the buyer?
It really depends on the state’s real estate & contract law. That’s why I asked about a signed contract. Real estate contracts in NC (my state), have to be in writing, and the earnest money has to be held in a trust account...could be the listing company’s acct, the buyer agent’s company acct, or even the closing attorney account. Trust accounts are heavily, heavily regulated in NC, so it doesn’t matter whose acct it is. The check must be deposited in the trust acct within 3 banking days, or there are stiff consequences. That money is absolutely held in the trust acct until closing or both parties agree to the release.
There’s also a due diligence period for several weeks after going under contract in which the buyer can back out for any or no reason and get the earnest money back. The due diligence period is the time the buyer uses to perform inspections, get the mortgage, hire the attorney. There’s generally a due diligence fee the buyer pays the seller upfront for this “option”. Seller is free to cash that check right then and spend it freely. The due diligence fee is usually much less than the earnest money.
After the due diligence period ends, the buyer is locked in and will probably lose the earnest money should they back out.
However, NC law provides that, if there is any dispute over the earnest money, it has to be held in the trust acct until there is a resolution...which means you’re probably going to see the judge. Small claims court is where most earnest money issues are taken.
Long story short...I’d sue in small claims court (depends on the earnest money amount vs small claims court maximum). Sounds like you should talk to a real estate attorney.
Yes.Earnest money was given to our realtor.
Yes-we made a counter offer with deadline for reply as yesterday .
No.His realtor and ours cannot reach him.
Not sure what ‘release of contract’ is.
He has a realtor and we have our own.
If you have a grand or so I would hire an attorney to sue both the “buyer” and his real estate agent and the agent’s company.
They signed a contract TO BUY your house, earnest money or not, and the fact that they aren’t following through is going to cost you money-—in other words, damages.
I was days from finalizing the purchase of my home when the stock market went through its last crazy gyrations...what, a little over three years ago?
It made me nervous enough that I inquired about backing out, and about the loss of my earnest money. My realtor told me the earnest money was really irrelevant...that yes I would lose it if I backed out but that I had also signed the purchase agreement which was a binding contract.
I called TWO different attorneys to see if this was true and they said yes (at least in my state) that the purchase agreement was binding; and if the market crashed to zero and I backed out I could be sued for the amount of the purchase price and any other damages they could think of.
If nothing else it will sure as hell get the other realtor’s attention.
Did the buyer accept your counter-offer, not verbally but signed, within the time period set forth in your counter offer? If he has a Realtor, the buyer would have given the deposit to his Realtor. Not sure about MN real estate practices but RE law is rather universal. I do not understand why the deposit was given to your Realtor and not his, as he is the buyer. The key is, did he sign the acceptance of your counter offer? If so, then he is in breach of contract and the deposit should be distributed to you at some point IF the Realtor actually collected the deposit. If the Realtor didn’t he/she knows they have a big problem.
Earnest money here is required to change hands and is deposited in seller’s account. It’s forfeited if buyer reneges, buyer keeps it, and applied against closing costs if and when the sale goes through. The amount of it if any varies and is negotiable.
“our realtor says we’ll never get the earnest money because it’s all just a theoretical thing everyone puts on paper but nobody ever gets because it usually costs more money persuing it than the amount of the money is.”
That is an extremely irresponsible thing for a Realtor to say to a client they are representing. It is not theoretical and I might add that a professional interested in fairness to their client would be advocating the release of the deposit to you.
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