Could I get my earnest money back if I backedup two days before the closing on a house?

Asked by Maria, Mon Nov 24, 2008

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Lori Rossi, Agent, Warwick, RI
Mon Nov 24, 2008
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Why did you back out? Did you lose your job or any other reason that you could not get financing? Did you sign off on your inspection contingencies?
0 votes
Ken Dooley, Agent, Chicago, IL
Tue Nov 25, 2008
Maria,

As others have said, contact an Attorney immediately and don't rely on anyone elses advice. Depending on the circumstances, sellers are not letting buyers walk away from their obligation.

Best of luck, Ken Dooley.
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Scott Newman, Agent, Chicago, IL
Mon Nov 24, 2008
Your attorney's guidance is the only one which you should follow, but on a basic level if you're past all the contingency dates and there's no legit disagreeement or issue holding you back you are obligated to close or lose your money. Also keep in mind you could be sued for specific performance which means you'd have to buy the property per the contract. If you've made a bad decision financially you're better off losing your earnest money than buying a home you cannot afford.
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Wayne Beals, Agent, Chicago, IL
Mon Nov 24, 2008
Before I comment, your attorney is the ONLY person who can help you with this question. It is also not possible to tell without a copy of your Real Estate Contract. That said, if you wish to terminate the transaction, you should get a copy of the executed contract to your attorney for review. Your attorney is the only one who can determine what position you are in. Your attorney is the only one who can determine if any contingencies or specific performance issues may exist.

Here's a little background on how contracts and contingencies relate to earnest money: Earnest money is typically considered liquidated damages in the case of buyer default. What this means is that if you do not perform your end of the agreement, the earnest money becomes compensation for damages to the seller. This may or may not be the full extent of the damages. The seller has likely spent time and money to prepare for the transaction as stipulated by the contract.

Contracts typically have performance dates. For example, typically a buyer agrees they will pursue acquiring financing diligently by a certain date. If you have been unable to do so, it is typically necessary to notify the seller in writing of the problem or request an extension of the date if more time will resolve the problem. Financing is typically a contingency in many contracts. In other words, if you diligently pursue financing, and are unable to obtain financing, and follow the time and notification duties of the contract, you have performed your end of the bargain, are NOT in default, and earnest money should not be at risk. Other clauses in a contract, such as a cash sale rider, etc, could modify this contingency. You NEED to check with an attorney with an actual executed copy of your contract for their assessment of what has been agreed to and if you are in default. You are in default if you have not performed your agreed end of the contract.

If you are simply getting cold feet, and have not contractual standing to terminate the contract, you have to weigh the potential losses of defaulting against proceeding with the purchase.

Your question needs to be answered by an attorney representing you. Anything else is just guessing.

Best of luck. Go see an attorney as soon as possible. Time may be of the essence.
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Scott Godzyk, Agent, Manchester, NH
Mon Nov 24, 2008
Maria in most cases NO, you may also be responsible for damages to the seller as noted in your purchase and sales agreement. The only chance you would have not to lose your deposit or face consequences are that you contingency to obtain a mortgage has not expired. as always with any contract you think of breaking you should seek the advise of an attorney, usually the first meeting is free to get some advise. good luck with working things out
Web Reference:  http://www.ScottSellsNH.com
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Travis Broad…, Agent, Wheeling, WV
Mon Nov 24, 2008
If it is simply buyers remorse that has caused you to back out, than yes you will lose your earnest money.

Please consider that the seller has probably gone through great lengths to setup the transfer of his property. Moving, ordering the dead, fixing inspection issues. Then 48 hours before closing the buyer wants out, they deserve that money.

If there is more to the situation than I know and the seller has lied or not disclosed something you might have a shot, but only an attorney can go after the cash, sorry!
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Kale Realty, Agent, Chicago, IL
Mon Nov 24, 2008
Probably not- When is your mortgage contingency period up?

I would recommend talking with your attorney and realtor on this one

Good luck
Web Reference:  http://www.kalerealty.com
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