Home Selling in Philadelphia>Question Details

Shane Wagman, Both Buyer and Seller in San Diego, CA

When selling your home, how long before buyer has to deposit 10%? If they don't, what are the consequences?

Asked by Shane Wagman, San Diego, CA Sun Mar 30, 2008

Scenario: Buyer signs Agreement of Sale, puts down $1,000 upon signing. Is there a recission period for Agreement of Sale? If rescinded, is the $1,000 liquidated damages if buyer rescinds? Also, when does buyer have to make the second, 10% deposit? If buyer does not do it by due date, are their any liquidated damages for that? Finally, let's say the buyer DOES make 10% deposit, and after that, buyer decides to pull out, is the 10% deposit considered liquidated damages?

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Answers

4
Marcy,

This all depends on what is on the Agreement Of Sale. There is a portion of the contract where the buyer's agent, when filling out the contract with the buyer, will write down the offer price, any initial deposits are subtracted and then theres a line directly beneath that for addition deposits to be paid within a certain amount of time which is subtracted. Then finally the amount which is due at settlement.

If the initial deposit is the only one written down without any further deposits, then the only monies there are is the initial deposit. If additional deposits are to be made after the contract is agreed upon, then the buyer needs to give the additional deposits by the date written on the Agreement Of Sale.

If the seller does not agree to the contract, or no answer is given, the buyer is not bound to the Agreement Of Sale and should have their initial deposit returned.

The buyer also does not "need" to deposit 10%. If this is what was worked out with the lender, then it is between the buyer and the lender as to when the actual down payment is needed, not the seller.

Damages can only paid out when either the buyer or the seller does not follow through with any portion of the contract. EXAMPLE: If either the buyer or seller decides to withdraw from the sale for no valid reason, damages could be paid to the "injured" party. Then this gets into litigation with a competent attorney or mediator.

I hope that helps.

Terrence Charest, e-Pro
Century 21 Associate
905 Easton Road
Willow Grove, PA 19090
Cell: 267.614.1494
2 votes Thank Flag Link Sun Mar 30, 2008
Previous posts were good. I would need to review the agreement-of-sale to fully answer the questions as the terms of the deal will determine how the escrow would be handled. It is important to note that whoever is holding the escrow would need a signed release by both sides to release the money to either the buyer or the seller. If no agreement is made, then it would need to go to court. Hopefully though, your deal can make it to a settlement table and the other answers to your questions would depend on your specific agreement. As the prior poster said, this is why is imperative in my opinion to have professional realtors handle deals for sellers and buyers. The FSBO market can be very tricky and is not worth the headaches for a lot of people. In many times, the buyers agent ends up doing all the work and more in the FSBO situation. Good luck !

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1 vote Thank Flag Link Sun Mar 30, 2008
Marcy
Who is your Realtor? They should be answering these questions.
If you are selling on your own, then talk with a real estate attorney.

Without seeing the contract, we cannot provide any advice. The first post was great, but the responder has not read your contract either.

A good Realtor can establish a balance between keeping the buyer accountable, and scaring off the buyer by being too demanding. In truth, at the point when the offer is accepted is when the Realtor earns their commission. There are too many viarables to provide a short answer, because circumstances and details change.
1 vote Thank Flag Link Sun Mar 30, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Cannot possible answer this question with as little info that has been provided. Buying a home is not like buying a car, which I think where the rescinding question is coming from...

I think you need to go back to your agent to get these answered...
0 votes Thank Flag Link Sun Mar 30, 2008
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