The seller of a foreclosure refuses to refund the deposit after lender denied application. Do I have to sue?

Asked by Chris, Royal Oak, MI Thu May 29, 2008

to get it back?

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6
Debra Drummo…, , Plymouth, MI
Thu May 29, 2008
Chris, Check the terms of the bank addendums you signed. Unfortunately, many of the banks selling foreclosures are writing into their addendums that the earnest money deposit will be forfeited, regardless of the reason, if the buyer is unable to purchase. Good luck!
Web Reference:  http://MichiganMoves.com
2 votes
, ,
Fri May 30, 2008
I have been seeing this too lately. I would guess it depends on the wording of the contract.

I'd assume since the banks are so busy fielding (sometimes multiple) offers on foreclosures and trying to unload quickly they don't want to waste time if the borrower is unqualified.

If you are working with a buyer's agent, they should have walked through the purchase agreement when you signed it and explained things. You need to try to get your agent to go to bat for you here. If that fails, talk to the listing agent, followed by an attorney if that doesnt solve the problem
1 vote
Debt Free Da…, , 85260
Thu May 29, 2008
I would contact the listing agents broker or the real estate department first before you sign with an attorney.
Web Reference:  http://getprequalified.com
1 vote
Connie, , Newport, MI
Thu May 29, 2008
Were you pre-approved to write an offer on this home?
1 vote
Frank Diaz, Agent, Honolulu, HI
Thu May 29, 2008
It depends on whether you have
A contingency for obtaining funds and/or
A financing contingency and/or
Buyer's obligations to obtain financing and/or
Termination provisions

I would call the escrow company first and ask them the status of the contract.
If you need an attorney, they have a recommendation for you as well.
1 vote
Bob Mitchell, Agent, Warren, MI
Thu May 29, 2008
Hi Chris,
As Debra said I have been seeing a lot of the earnest money deposit becoming non-refundable after the inspection period. I would check with an attorney. Good luck.
0 votes
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