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alicewenwenc…, Home Buyer in Newton, MA

Back out during a negotiating process?

Asked by alicewenwencai, Newton, MA Fri Nov 16, 2012

Hello, we are in the process of negotiating the price with the seller, we already had couple conteroffers from both sides. Now the asking price is still higher than what we offered even though not a big difference. Will we lose the deposit if we back out now?

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Louis Wolfson’s answer
Alice as you can see there is more information needed to give you the right answer. Everyone is making assumptions.

Initial offer - not accepted no risk no matter how many negotiations.
Accepted offer - possible risk
Accepted offer after inspection negotiation - possible risk
Accepted offer before signing p&s - possible risk
Accepted offer financing contingency - possilble risk

Why I say possible risk above is there is always the chance, although unlikely, that the seller won't release you and want to hold the deposit. Which can require an attorney to represent you to obtain it back. However your attorney should of been protecting you from the P&S stand point and your buyers agent should of been protecting you from the offering standpoint. Very simple language in the offer is all it takes. Subject to a mutually acceptable purchase and sales agreement. Subject to a formal inspection and approval of the premises by the buyer and or their agents. Subject to the buyer obtaining a mortgage and or an appraisal at or greater than the purchase price.

Keep us posted.

Louis
2 votes Thank Flag Link Sat Nov 17, 2012
Make sure to retract your offer in writing, unless the time period has expired.
If there is no written agreement, your deposit could be safe, but this is really a question for your attorney who knows the details of your offer(s).


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0 votes Thank Flag Link Wed Nov 21, 2012
Hi Alice,
I think your answer may be in your question. If you are still negotiating then you have not reached a mutual agreement between you and the seller. So I'm not sure what deposit money you have given. Are you referring to the initial $$ that accompany the offer as a deposit to make it binding?. Do you have a buyer's agent representing you or are you buying directly from the seller yourself? (this is one of the reasons, as already mentioned here, to have your own agent/broker so he/she can guide you through the process). In any case, since it is not quite clear from the information provided, and it looks as though this may be or become a legal issue, you should talk to your attorney. Keep us posted Good luck
0 votes Thank Flag Link Fri Nov 16, 2012
Let me just understand where you are at. You have gone back and forth with counter offers on a property and have not come to terms on price either verbally or in writing? I believe that is what you are saying.

If that is a case, no your deposit money should not be at risk. There has never been an acceptance of terms on wither party parts. For your deposit money to be at risk you would have to come to terms and have a signed contract with all parties signatures on the contract.

Basically for a contract to be valid there needs to be offer and acceptance. From what I see there has been no acceptance.

If it is in question, consult an attorney to make sure your protected.
0 votes Thank Flag Link Fri Nov 16, 2012
Alice,

Agreed with the answers below. If you don't have the terms formally agreed upon, and a contract signed by both parties, then in reality you have nothing and your deposit should be returned.

I'm a little confused as to why a deposit was given to the seller at all. Generally, earnest money is only given to the seller AFTER at least the purchase price/financing terms/closing date have been agreed to by both parties, and you have a signed contract by both the buyer & seller.
0 votes Thank Flag Link Fri Nov 16, 2012
Your offer is most likely, it seems, being negotiated verbally at this point. If your written offer has not been signed at an agreed-upon price, it is not a valid offer - thus it is not a valid contract as such. Your deposit should therefore not be at risk, since it is in verbal negotiation. Not until your offer has been signed within specific time guidelines, at a specific agreed-upon price, does your deposit become at risk.
0 votes Thank Flag Link Fri Nov 16, 2012
You have the right to get your deposit back if the offer was not accepted! Even if it was accepted, you could back out of the deal based on any contingencies you might have put in your offer.

I am guessing you are working without a Buyer's Agent and would strongly encourage you gainst do-it-yourself approaches. If you are a 1st time buyer, I'd suggest you to work with an Accredited Buyer Rep or another agent experienced in working with 1st time buyers, so you'll know that agent represents your interests, rather than buyers and guides you through the entire process step-by-step without you loosing sleep over simple items. There are a lot of steps in the process and the initial steps are not the most difficult!
0 votes Thank Flag Link Fri Nov 16, 2012
There a of lot of "it depends" in a complete answer, but it doesn't look like you would lose anything at this stage. If their last counter offer is on the table (meaning they did not accept your last counter) then you can just say no. I assume your agent is holding your deposit check and will just give it back to you. If the sellers haven't signed the offer, there is no contract.
0 votes Thank Flag Link Fri Nov 16, 2012
If they have not accepted your offer, your deposit is not at risk. I assume that you do not have an agent representing you. This is a time where the expertise of an agent on your side, representing your interests, would prove most valuable. If you do have an agent, this question should be posed to them. You should also consult your attorney. If you do not have one, you should.
0 votes Thank Flag Link Fri Nov 16, 2012
Alice, when I submit an Offer for a client, I do not turn the deposit check over until terms have been reached and both sides have signed the Offer.

If you do not come to terms, you do not lose your deposit.

I hope this helps!

j
0 votes Thank Flag Link Fri Nov 16, 2012
If you offer was not accepted then you have no contract therefore your deposit is refundable. If the offer was accepted in writing and you now feel differently about the purchase then your deposit would be considered "at risk".
0 votes Thank Flag Link Fri Nov 16, 2012
If its not much difference you should examine how much extra it will really cost.

Lets assume you are putting 20% down and there is a $5000 difference between you and the seller. Accepting the $5 extra in purchase price will cost you $1k in down payment money. Your monthly payment will go up too but just by a few $. If its a house you really want, find a way.
0 votes Thank Flag Link Fri Nov 16, 2012
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