Home Selling in Seattle>Question Details

Loaferpen, Home Seller in Seattle, WA

Who keeps earnest money. Buyer bought property unseen with an inspect contengency. 3 weeks later buyer backed out without an inspection.

Asked by Loaferpen, Seattle, WA Thu Nov 7, 2013

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11
It is impossible for anyone to answer this without seeing the contract, and even with seeing the contract they should not answer it because that would be giving legal advice. You should consult an attorney.

Even assuming that the inspection period has passed there may be other reasons the buyer MAY BE entitled to their earnest money back. A few that come to mind are having never received a Form 17 seller disclosure, having not received a title report if the title contingency form was used and there is a title issue, the contract not having a proper legal description, and a decline in financing assuming a financing contingency was used. I'm sure there are other situations that are just not coming to me right now. But even assuming one of those conditions is present, that does not absolutely mean that the buyer would be entitled to the earnest money back. You would need to consult an attorney.
1 vote Thank Flag Link Fri Nov 8, 2013
Best call of action is to return the deposit to the buyer then go from there. In NJ you can't just hold onto the deposit even if the bueyr defaults. It all has to go through the legal system if you decide to sue for compensatory damages.
0 votes Thank Flag Link Sun Dec 15, 2013
It will say in the contract what will happen if the buyer backs out.
0 votes Thank Flag Link Wed Nov 13, 2013
Refer to the contract. You will find the answer within.
0 votes Thank Flag Link Fri Nov 8, 2013
It depends what the contract states. Was the buyer within the time frame agreed for an inspection? if so they may get their deposit back, if not they may lose it
0 votes Thank Flag Link Fri Nov 8, 2013
It's all about the contract....what does the contract say? Even though there are "standard" or "default" figures for inspection period, the buyer and seller can agree on any number they want...what did you agree to? Was the cancellation within that timeframe?
0 votes Thank Flag Link Fri Nov 8, 2013
The wording of the contract is key in determining who keeps the earnest money. Most contracts will not allow 3 weeks for an inspection contingency. Consult your Realtor or a Real Estate Attorney if this is a FSBO.

Best of luck!
0 votes Thank Flag Link Fri Nov 8, 2013
How do you know there was no inspection? Perhaps the buyer conducted an informal inspection? Or, perhaps the inspection involved a review of the title, rather than an inspection of the physical structure. It may be impossible to say whether or not there was an inspection. The challenge is, no one in this forum is party to your transaction, nor do we have access to your Purchase & Sale Agreement. Therefore, it's just a guessing game for those who respond to your question. You need to consult with your agent, the managing broker, and possibly an attorney. Good luck to you.
0 votes Thank Flag Link Thu Nov 7, 2013
Seller should get the earnest money, because the Buyer waived his inspection clause by not doint it in a timely manner.
0 votes Thank Flag Link Thu Nov 7, 2013
Loaferpen,
Your contract will indicate this. Without seeing how the offer was written, we really can't say. 3 weeks is beyond most standard contingencies other than the financing contingency. The financing contingency, if they used one will require a good faith effort to obtain financing and generally will require a decline from the lender for a reason.
Your agent/broker should be able to review the offer with you and advise you. If you don't have a broker and this is a FSBO, you'll need to read the contract and consult an attorney.
0 votes Thank Flag Link Thu Nov 7, 2013
Well, if you were using a form of agreement drafted by the NWMLS you will find a paragraph that talks about time being of the essence.

It depends on the time-frames outlined in the agreement. If the time-frames were adhered to the buyer gets their earnest money returned to them.
0 votes Thank Flag Link Thu Nov 7, 2013
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