Home Buying in 20850>Question Details

Fahmida Chow…, Other/Just Looking in Rockville, MD

Earnest money refund

Asked by Fahmida Chowdhury, Rockville, MD Tue Sep 23, 2008

We are planning to make an offer on a house that has an "As Is" clause - it is an estate sale. We would put a home inspection contingency, but we are not sure whether our earnest money deposit will be refunded in full if we decide to back out of the contract due to some major problem uncovered during home inspection. The property is in Montgomery County, MD. What should we do to make sure that we don't lose any of the deposit?

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Fahmida,

Make sure you review this in detail with your buyer agent. If you are using the "AS-IS" inspection language in the standard GCAAR Addendum of Clauses, then 'no', you cannot void the contract based on the results of the home inspection.

To protect yourself, you can add simple language in the contract something like - 'the buyer can declare the contract null and void within X days of ratification in which case the buyer's escrow deposit will be refunded in full'. Don't do this yourself! If you are not working with a buyer's agent, then have a settlement/real estate attorney create the offer and insure that you have the necessary language allowing you to void the contract within the inspection period.

Good luck.
1 vote Thank Flag Link Tue Sep 23, 2008
Speak to your realtor but I would also recommend speaking to a title attorney. I know a very good one that will speak to you and answer your question if you mention my name. Hopefully you will use them when you purchase your home, there won't be anyone better for you. Please let me know if you require my assistance.

Thanks,
1 vote Thank Flag Link Tue Sep 23, 2008
It's all about the contingency clauses. MAke sure your agent clearly states this when writing the offer.
0 votes Thank Flag Link Wed Nov 20, 2013
Your Realtor can write the offer to include a home inspection contingency which gives you an "out" during the time period of the contingency
0 votes Thank Flag Link Tue Nov 19, 2013
Your buyers agent should be able to assist you with these questions. All contracts including foreclosures allow you inspection on a property within x days. Upon your review if your preference NOT to purchase home their is a standard clause where you can amend contract return of earnest money. If you exceed option time period you are facing other legal issues.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
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0 votes Thank Flag Link Tue Sep 23, 2008
If your offer is contingent upon a satisfactory home inspection, your deposit would be refundable if you determine that the inspection was not acceptable. You would need to respond to the seller, in writing ,prior to the expiration of the home inspection contingency time period. If you have an agent, they should be able to advise you. Good luck!

Rick Reed
Congressional Residential Realty
Rockville, Md 301-528-REED (7333)
Web Reference: http://www.teamreed.info
0 votes Thank Flag Link Tue Sep 23, 2008
Normally, that's exactly why you want the home inspection contingency, so you after the inspection if you decide to back-out you can still get your Earnest Money Deposit back in full.

BUT since this is an "as is" contract that is the risk you would take... that's the whole point of an "as is" sale.
0 votes Thank Flag Link Tue Sep 23, 2008
Fahmida,

If there's an inspection contingency that allows you to back out (pretty standard), then you would get your deposit back. You can always have your agent write in a clause that specifically states that.

Ted Stewart, CRS, e-PRO
Yerman Witman Gaines and Conklin Realty
0 votes Thank Flag Link Tue Sep 23, 2008
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