Does an inspection contingency entitle me to return of earnest money if seller refuses to repair/credit?
I have a contract pending with a seller for the purchase of a house, and I submitted $6K in earnest money. The contract has a home inspection clause, and my home inspector found various items that require repair or replacement, such as roof, plumbing, foundation, windows, etc. I asked the seller to fix those items. Seller refused and offered a credit. I asked for more and the seller refused. I canceled the deal, and now the seller won't refund my earnest money, saying that I canceled in bad faith. Do I need to sue this joker to get my earnest money back? The money was held by the seller's agent, and the agent turned over the money to the seller without my approval, and I am thinking about suing both the seller and his agent. Am I wrong here? Am I out of luck?
Hi Shoshanna,
You could be completely right. In both MA and NH, escrow agents would never turn monies over without a release signed by all parties. Not sure what state you are from but the home inspection contingency on our standard forms varies a little between MA and NH. It sounds like you have to give the Seller the opportunity to fix the repairs or offer a credit like you mentioned. Would it help if you got estimates from licensed contractors to substantiate your valuation of repairs? You might also want to call the broker of record for the real estate office you dealt with. Good Luck
Darlene
First thing is teh broker can not turn any money over to th seller or to anyone without the buyer and sellers signatures. he has violated state law regarding escrow deposits. Second as far as the inspection contingincy, if say there were $5000 worth or damages and he offered you only $2500 in credit then yes you have the right to back out in writing as long as you are within the dates specified in your purchase and sales. If the seller offered $5000 credit which was the full amount of damages and you want $8000 then you are wrong and do not have a right to back out. You may have to seek the advise of a real estate attorney for guidelines. feel free to come back on and add a comment of which one if these sceanrios you come under and i can try to assist you again. good luck with working it out
Shoshanna, that depends on how your contract was written. If the contract is our standard 4.0 contract, here in the northern burbs, it reads:
Under section 10 (professional inspections) "... if prior to the expiration of the 10 (10) busines days after date of acceptance, written agreement is not reached by the Parties with respect to the resolution of inspection issues, then this contract shasll be null and void.
Under Section 26... it also states: In every instance where this contract shall be deemed null and void... the following shall be deemed incorporated: "and earnest money refunded to Buyer upon written direction of the Parties to escrowee...."
So... it sounds as though you're legally in the right... but I'm not an attorney... you should check with your attorney for legal advice.
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