elizabeth, Other/Just Looking in Fredericksburg, VA

Once a contract becomes void, does a release of contract form still need to be signed?

Asked by elizabeth, Fredericksburg, VA Wed Jan 7, 2009

Contract became void because we did not meet the financial contingencies. IE- our loan was declined because of insufficient funds; lack of collateral. Do we still need to sign a release from contract?
Our real estate agent was aware from the very beginning that we have limited funds, and we were seeking 100% financing. The lender we were working with found a loan that would be 100%; we were still required to show an amount equal to 1% of the loan in our checking account. We were not able to do this, and so our loan application was declined.
We hadn't heard from the real estate agent for over a month after our loan was declined; but he contacted us 2 days ago to have us sign the form. We don't mind signing a form stating a release of our claim on the property, but we also don't want to open ourselves up to either him or the sellers claiming we owe several different fees. We have already paid what we were responsible for; because of our finances we cannot do ANY more. Please advise

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Elizabeth, Yes you will need to sign a release of contract. I am assuming you gave a good faith deposit with your contract and I am sure if you did you would like to get it back. Your agents company has to hold that deposit in an escrow account until all parties to the contract mutually agree to how the funds will be dispersed. Also, you will want to read your buyers agent agreement carefully to see what your obligations under that agreement are.
Best of Luck to you!

Warm Regards,
Eunice Waller
Prudential Simpson & Associates
540-842-1061 direct

email: ewaller764@aol.com

web site: http://www.FredericksburgHomeSource.com

I want to be your BRFF ~ Best Realtor Friend Forever!
1 vote Thank Flag Link Wed Jan 7, 2009
Elizabeth - Sorry, to hear that you weren't able to make it to settlement on this property.

The short answer is yes, it is needed for a release of the deposit.

We had a similar situation recently when a contract fell through on one of the contigencies, but a Release of Sales Contract and Deposit was required. Our form addresses who the earnest money deposit is to be released to & in what percentages (in case it is split among several parties) and also fully discharges both brokerages, buyer, & seller from any & all claims against each other. Additionally, if any title work, appraisal, or survey work was conducted it will determine who is paying for that, which is usually the party that caused the contract to fall through.

So read the Release carefully to make sure that you are receiving 100% of the deposit back and then check your Buyer Agents Agreement if you have one, to see if it includes any fees that may be payable to your agent/agents brokerage for any reason.

Best of luck,

AJ Heidmann, ABR, CRS, e-PRO
Cell 703-474-1260 ~ Office 703-518-8300 ~ Fax 703-518-8314
AHeidmann@CBMove.com
Coldwell Banker Residential Brokerage
310 King Street, Alexandria, VA 22314
Licensed in Virginia
1 vote Thank Flag Link Wed Jan 7, 2009
Elizabeth, Yes you will need to sign a release of contract. I am assuming you gave a good faith deposit with your contract and I am sure if you did you would like to get it back. Your agents company has to hold that deposit in an escrow account until all parties to the contract mutually agree to how the funds will be dispersed. Also, you will want to read your buyers agent agreement carefully to see what your obligations under that agreement are.
Best of Luck to you!

Warm Regards,
Eunice Waller
Prudential Simpson & Associates
540-842-1061 direct

email: ewaller764@aol.com

web site: http://www.FredericksburgHomeSource.com

I want to be your BRFF ~ Best Realtor Friend Forever!
0 votes Thank Flag Link Wed Jan 7, 2009
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