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We had one we had to fight for. Our buyers ended up with their money back.
Locust Valley, NY
Sandy Padula & Norm Pa...
John McCormack, CRS
One time and it was only $100.00. I had an agent try to keep my clients one time, but I fought tough and made threats. They decided to return the money. It is hard to keep a deposit in California.
Lake Forest, CA
Yes. It is only fair that the buyer forfeit the earnest money if she defaults on the agreement. The agreement language should cover this situation.
I understand that a buyer can refuse to do this and create delays in the remarketing of the property, but she should understand what she agreed to and should keep her side of the agreement.
The size of the earnest money deposit should be negotiated with this possibility in mind.
Locust Valley, NY
Rio Rancho, NM
Close, but was able to negotiate a split to the satisfaction of the parties.
Luckily I have not. That is not a good position for the seller or buyer to be in. Most cases I've heard of are worked out before it gets too involved.
I had one where they had to let go their EMD and they understood & knew clearly they had to let go their deposit rather than seller coming after them for liquid damages. Fortunately it is very rare we have to face this issue.
Yes, my buyers divorce was delayed so he lost the $50,000 he put down on a home.
Only from the listing side...
No. Ouch, divorce and crazy stuff where people are involved. We never know until the deal closes.
Had it happen a several times when I was the listing agent. Both times it was because the buyer was honest, fair and ethical and understood that their actions had caused delays and financial injury to my clients. They willingly forfeited their deposit.
In Vrginia is usually a difficult and time consuming process to retain the deposit of a purchaser who will not willingly forfeit.
When the situation arisesI always explain to my sellers that according to the terms of contract it be irnclad that they are legally entitled to retsain a buyers
I have had this happen a few times. In one case the buyer knew they wouldn't be getting the money back, and in another case the buyer was very upset. Interesting enough...this happened to the same sellers with two different buyers on the same house.
Couple years ago I got a call from a buyer I had represented a couple years prior. He defaulted because of a condition of his loan. He needed to straighten a credit issue for the lender to get the loan processed , a utility charge by his wife who refused to pay and he wasn't going to pay it either. It was a couple hundred dollars. He obviously did not get the loan and just would not speak to anyone, return calls, zip communication. He called wanting to know when he could get his earnest money back. He let a couple hundred dollars keep him from going from a delapidated rental to a nice home only a mile from where he worked.
Many years ago, I represented Sellers who negotiated a contract with a young couple who were getting married. Three days before closing, the couple's lender informed me that the couple broke up and no longer wanted to purchase the house. They immediately agreed to forfeit their earnest money.
Yes, I am in that now where the seller signed an extension and the buyer still couldn't close. The seller's agent said that since this took so long they were keeping the EM. We replied that in Oklahoma this requires a sign off by both parties and agetns involved otherwise it is a violation of state law. We would first have to do an interpleader which cost both parties money.
No I have not. I try to prepare all parties for what's coming and granted, sometimes the unexpected does happen.
Yes, I remember once, the buyer backed out and it was several months before he got his earnest money back and recently a buyer who forfeited his earnest money. Invaluable lessons learned from both incidents.
I've been on the sellers side & we refused to return the EM. That was many years ago & the EM was deposited with the state for arbitration.
There was an additional story where the buyers agent forged the sellers signatures to release it & it was caught somehow. I knew the sellers hadn't signed it because they told me they NEVER would. Resold the house but I believe a year had gone by when that stunt was pulled.
Thankfully I don't have to worry about the end of the business too much because I mostly work with people who already own the facility or home.
It's rare, but it happens especially if the buyer has removed all their contingencies and the seller has preformed as agreed. I had a $500 deposit held in my broker's trust account so long--5 years I think it was--that I had to, by law, escheat the money to the State. What a hassle. That was in the early 1980s when brokers had trust accounts for earnest money deposits.
Sure, several times. However, even when one party wouldn't sign the resease and return of earnest money, we get it done by notice.
It's all covered by the Contract of Sale.
I represented the Seller in a transaction where the Buyer defaulted. My Seller received the earnest money and sold to another Buyer quickly so at least my client was happy.
Yes, a couple of times. Never a very pretty situation. Though, luckily this is something I can leave for the attorneys to argue over.
Yes, it is a part of our business. Sometimes it is better to forfeit your earnest money then buy into a bigger problem and go forward with the purchase just to keep the earnest money.
I have demanded it for my sellers in some cases and had to convince my buyers at other times that their actions would result in a breach of contract and they are subject to losing their earnest money.
Yes, and it was my aunt who lost $10,000 because , against my advice, she signed a NON-REFUNDABLE clause. My husband always said some people had more money than brains, and this was certainly the case here!
A few times. Once, a few years ago on an REO, my listing, the bank's addendum clearly stated on page one that after 15 days all contingencies are removed and the earnest money becomes non refundable. No one on the buyer's side read it and when they terminated a day before closing they lost their $2500 EM. I got calls threatening to file a complaint from both the lender and buyer's broker. I told them to read the addendum. A couple days later the buyer's agent called me up crying saying his buyer was going to beat him up if he didn't reimburse him his $2500. He said he didn't have it and asked if I would cover it for him so he wouldn't get his a$$ kicked. I told him to stop calling me. Luckily that loser left the business not long after that.
Yes, twice. Once was when we were a week from closing and the sellers' tenants had moved out. The buyers decided to get a divorce instead of a house. When the buyer complained and I told her she should consider herself lucky that the sellers didn't sue for performance, she went to her attorney - who demanded that I stop harassing her!
The other time made me disgusted with all concerned. It was the only time I saw the title company demand money for the preliminary when the property was still offered for sale - and the only time I ever saw our attorney's office demand payment for paperwork when the deal fell through. I was sure it was because my buyer was in Hong Kong. He couldn't close because the government refused to give him a visa to come to the U.S.
Back in those days earnest money here was typically only about $100 - so not worth getting into a court battle about it.
Yes - last month my sellers got $45,000 in earnest money when the buyer found out (on a non-contingent contract) that he would not be able to gather enough funds to close.
Only 2 in 39 years. The 2nd one was funny. Last day of escrow and I represented the Seller. The Buyer's agent was so upset that she told the Buyer he had to sign the release! Easy.
Jack Lewitz Mine was a case where the buyer should have gotten back the EMS and the seller refused to sign the release. The seller never did sign it.
Yes. I have had this unfortunate experience. One case actually lead to litigation.
Yes and usually when the buyer backs out after all contingencies have expired. In one case, the buyer even said, they changed their mind, they then list their deposit