Home Buying in 91977>Question Details

Jameskerry41, Home Buyer in San Diego, CA

when presenting a check in escrow (earnest money)?

Asked by Jameskerry41, San Diego, CA Tue Mar 27, 2012

what type of scenarios may present itself in 'losing' those funds (as a buyer) or is it pretty much safe and generally returnable?

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Answers

5
It is generally returnable. Here are the caveats...

If you cancel the escrow prior to your contingency period expiring..you have a right to your deposit back. If you cancel after the contingency period expires, you will lose it.

if you do cancel, the seller must agree to return it and technically speaking, can give you a difficult time in doing so. In 10 years of practice however, I've only seen that happen once, however!
0 votes Thank Flag Link Wed Apr 4, 2012
awesome; thank you very much :)
Flag Wed Apr 4, 2012
Thanks for the answers so far;) yes of course I grilled my agent on this! she's assured me the money is returnable; however, $4K is a lot of cash to have floatin' out there and yes, I read the contract as well but it doesn't hurt to ask; you guys are the subject matter experts and perhaps different scenarios have presented themselves over the years...again I appreciate your response(s)~!
0 votes Thank Flag Link Tue Mar 27, 2012
You are quite welcome. I understand your feelings. I remember my first home purchase and I think I asked my agent that same question several times myself
Flag Tue Mar 27, 2012
First off, if you are working with a Realtor and submitting offers and they havent explained this to you by now, that is a problem. Typically the first 17 days in escrow is your contingency ( Inspection, Loan and Appraisal Contingencies) period. Meaning if something happened and you couldnt purchase the home and had to back out, the deposit is fully refundable. After those 17 days IF the contingencies are removed and you have to back out of the deal, the seller could legally keep your deposit!
0 votes Thank Flag Link Tue Mar 27, 2012
In most contracts the buyer's deposit is protected via several contingencies; stipulations in the contract that says if "X" happens ( failure to get loan approval, failure for lender home appraisal coming at value, failure at the physical inspection) then the buyer can cancel the contract and their earnest money deposit returned.

Typically after 17 days (depending how the purchase contract is written and if the default timelines are changed) the buyer will be required to 'remove all contingencies.'. Once contingencies are removed is when your earnest money deposit is at risk.

If you have any questions your agent (if you have one) can walk you through the contract contingencies.

If I can be of further help please do not hesitate to ask or write.

Dave
Web Reference: Http://davidcares.com
0 votes Thank Flag Link Tue Mar 27, 2012
This is a question that you really need to consult with your agent on. It would not be appropriate for us to advise without intimate knowledge or involvement in the transaction. You can also refer to your contract that you signed as it should be clearly stated as well. Do not be afraid to ask your agent as many questions as you want, that is what they are getting compensated for and their fiduciary duty to you.... Good Luck....
0 votes Thank Flag Link Tue Mar 27, 2012
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