First of all the best answer anyone can/should give is to contact an attorney that specializes in real estate.
But since you asked here in this forum there are several answers to your question:
- if your contract is the standard AAR contract with no other addendum or language added or subtracted from then these answers may address your concern.
-buyers typically have a 10 day inspection period in which they can get the home inspected for any potential issues. During this time the buyer (only the buyer) can terminate the contract without putting the earnest money at risk.
-if the property resides in an HOA the buyer has 5 days from receipt to review the CCRs and financials. During this time the buyer may cancel without putting the earnest money at risk.
-if the home post inspection turns up something that is material to the buyer and the buyer requests repairs or financial compensation and the terms cannot be agreed upon then the buyer may cancel without putting the earnest money at risk.
-if the buyer can no longer qualify for a loan and is shown by the lender with an LSU and if the contract is contingent upon lender qualification then the buyer may be able to cancel without putting earnest money at risk.
-if all of these conditions have expired and been met and the buyer decides to cancel the contract, the earnest money may be forfeited and can be sued for any liable damages that may have been incurred by the seller. Also, if the buyer was represented by a Realtor and they have a buyer broker agreement, this agreement also may have language that stipulates the buyer may have to pay if a deal is cancelled under abnormal conditions.
-so not only is the earnest money at risk, but there is also potential for a lawsuit by the seller and potential law suit from the buyer's agent.
-buying a home is not like buying a car. it should be a decision taken very seriously and with forethought on if you can perform on the contract or not. Life does happen and sometimes life will throw us a curve ball but unfortunately when buying a home not everyone has to be empathetic to the situation.
If you are a seller, your options are very limited and you can only cancel if the buyer breaches the contract and does not correct the breach after a 3-day cure notice.
If you are the buyer, you have a few ways where you can cancel and get your earnest money back. I'll be more than happy to help you if you cal, email, or text me with the very specifics of your case.
Please don't hesitate to call/text me at 1-602-326-3552, or reply to this email with any questions or comments.
Moe Hegazy, Realtor
Cell: (602) 326-3552
Fax: (623) 242-1040
My first question would be...are you the buyer or the seller? If you are the buyer, you will lose your earnest money deposit and the sellers could bring suit against you for breach of contract; read the contract very carefully to see if there any provisions in it as such.
If you are the seller and are asking as if you are going to allow the property go into foreclosure, again proceed with caution.
In AZ a Trustee cannot initiate a foreclosure unless the payments are behind 90 days or more; with that being said you should most definitely speak with a real estate attorney to know if the buyer can file suit against you for breach of contract.
Hope this helps.
Envoy Mortgage, Ltd.
NMLS# 947738 / AZ# 0921717
You can also contact a real estate attorney to have them review your contract and status of the transaction.
Some title companies retain an attorney on staff to review these kinds of situations and can advise you as to what they would do with the earnest money.
Good luck to you. If you need a name of a real estate lawyer, give me a call and I can help you out.
Brooke C. Martin
Designated Broker, Exit Realty Dynamics
Unfortunately, you very likely only risk the lose of the money you have placed in escrow. Everyone else will need to eat their loses.
It is possible there are better alternatives to 'walk away' that place you at little risk.
But who know! Buyers gone rogue can get themselves in a mess.
This is a question you need to direct towards your agent, not strangers on the internet.
Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
Keller Williams Realty