Home Selling in Indianapolis>Question Details

Jolene Kerni…, Both Buyer and Seller in Indianapolis, IN

Under what circumstances can I retain the earnest money from a buyer who pulls out of the sale?

Asked by Jolene Kernick, Indianapolis, IN Mon Dec 16, 2013

The buyer wanted us to do electrical and contract work that was not required by state code. We refused and now they have backed out of the deal. Can I retain the earnest money?

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The sale was through a realtor. The realtor is not confident that we could win the earnest money. Just looking for a second opinion.
0 votes Thank Flag Link Mon Dec 16, 2013
Jolene,
I assume by the nature of your question, this was a for sale by owner. If so, I would seek the advice of an attorney. A seasoned realtor is well versed in the buying and selling process and would have guided you through this. There are several conditions where it is mandatory that you return the earnest money to the buyer. FSBO's take in some risk and actually disadvantage in handling this themselves. Take a look at http://www.homesaleindy.com/fsbo and it will tell you more.
0 votes Thank Flag Link Mon Dec 16, 2013
I don't know Jolene,
Was the issue a Zensko panel or reverse polarity?
Two dramatically different electrical issues that would not be required by the state but have incredible ramifications on a sale. One is NO SALE while the other is 'no way!"
What does your agent say?
0 votes Thank Flag Link Mon Dec 16, 2013
Jolene:

A typical purchase contract used by members of the Indiana Association of REALTORS contains an inspection contingency. The language in that section is reasonably specific: any defect that the Buyer discovers during their inspection which the seller will not correct *TO THE BUYER'S SATISFACTION* may be considered grounds to terminate the agreement and have their earnest money returned.

A Seller should weigh several things before refusing to make repairs of newly-discovered defects:

- If the item is a defect noted by a licensed professional and it's not repaired, that defect will need to be disclosed to subsequent buyer prospects or repaired.

- What is the cost to put the house back on the market versus making the repair and getting the deal done?

Good luck!

Joe Shoemaker
Principal Broker, REALTOR®
MacDuff Realty Group, LLC
317 413.8501
joe@joeshoe.com
http://www.facebook.com/joeshoe
http://twitter.com/#!/jojosmojo
0 votes Thank Flag Link Mon Dec 16, 2013
It depends upon the terms of your contract. This question is best answered by your attorney.
0 votes Thank Flag Link Mon Dec 16, 2013
Also, in you last question you mentioned going for sale by owner because you wanted to avoid Realtor fees. Please check out the For Sale By Owner Facts that point out that going FSBO is actually more expensive than listing with a Realtor, regarding both time and money.

http://www.soldbyavery.net/general/fsbo-facts-for-sale-by-ow…

Avery Garrett, Realtor
Coldwell Banker Kaiser
317-721-2274
soldbyavery@gmail.com
0 votes Thank Flag Link Mon Dec 16, 2013
I would say that it depends on your contract, but I'm not a licensed Attorney. I certainly hope that you had a Realtor involved ? Was there an inspection contingency ?- A timeframe for the buyer to do a home inspection and respond back in writing....... If so, I would advise reading that contingency thoroughly
0 votes Thank Flag Link Mon Dec 16, 2013
Not if the offer was contingent on inspection responses. I have had that happen before with inspections companies pointing out those things. Realtors usually prep their clients for this eventuality.

I see you asked a question previously about selling a house to a friend. Hopefully this isn't the friend! :)

If you would like some expert advice, I would be happy to assist you selling your home. I deal with situations like this everyday, and know how to handle them.

Feel free to reach out to me via email or phone.

Thank you.

Avery Garrett, Realtor
Coldwell Banker Kaiser
317-721-2274
soldbyavery@gmail.com
Web Reference: http://www.soldbyavery.net
0 votes Thank Flag Link Mon Dec 16, 2013
Your real estate agent knows your contract deal better than anyone else; how are they advising you?
0 votes Thank Flag Link Mon Dec 16, 2013
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