SELLER REFUSE TO RELEASE BACK OUR DEPOSIT FOR A NEW HOME PURCHASE

Asked by evieparungao, Vallejo, CA Thu Sep 20, 2012

I signed a contract to purchase a new home a month ago on a location which is close to the hill. Upon purchase i was assured by seller's agent that it's not a fire hazard zone. Then later on i found out that there's a big fire happened on that location just a year ago that was not relayed to us upon purchase that put me on big fear for my safety so i decided to cancel the purchase and to my surprise that the seller refused to give me back my $5,000 deposit and asking me to sign their pre-printed cancellation letter saying i won't get my money back which i refused to sign. The lot remains untouched and they haven't started any construction yet. What do i do next? I want to get my money back.

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Jeffrey Sand…, Agent, Los Angeles, CA
Thu Sep 20, 2012
Did you have an agent representing you? Were your contingencies removed? You really need to involve your agent and their broker. If it was a dual agency then your case could be strengthened. If all contingencies were removed yet a material fact is disclosed or discovered afterwards, you should have a good claim to have your deposit returned. Furthermore, even if you removed your contingency, if the seller has not provided all of the statutory disclosures you may also have a case for the return of your deposit.

Consult your agent, their broker and consult a real estate attorney to determine your rights.
1 vote
I too am in a similar situation. My husband and put a substantial deposit down on a home in Bradenton FL and the only contingency written on the P&S was if any repairs exceeded total amount of $5000 then we could walk away and not lose our deposit. As it turns out, we had the termite inspection done after we had put the deposit down and found out the attic has rat infestation. Our real estate agent who is a buyers agent from what we thought was a reputable real estate company had insisted for us to put a deposit of at least 5% and this was before any inspections were done. She did nothing to protect our interests. We requested to cancel our contract. In writing as the rat infestation was not disclosed to us before we signed the P & S agreement. The sellers RE Agent is telling us the sellers can legally keep our deposit and even go after the down payment if we do not close on this house. It's like a nightmare that you can't wake up from.
Flag Fri Mar 7, 2014
Dorene Slavi…, Agent, Torrance, CA
Sat Sep 22, 2012
Dear Evieparungao,

At this point, you must go back to the contracts that you signed. New Home builders often have their own contracts, but all purchase contracts have "disclosures". These will list the potential hazards for the buyer so that you are not un aware of the risks. In the State of California, we have many because of earthquakes and so on.
Unfortunately we do not have copies of these and cannot tell you what your options might be. I would speak to a Real Estate Attorney and discuss your situation.
0 votes
Centermac Re…, Agent, Fremont, CA
Thu Sep 20, 2012
The contract for buying a new home from a developer can be different from the terms in the CAR form. While each developer designs their form contract, there are similarities from one to another. Generally speaking, the right to cancel is quite limited once you have gone past the loan approval process.

However, if there is any misrepresentation by the sales rep that you have proof of, it can still be rescinded based on fraud.

My experience has always been that developers would typically appear adamant on their position but in the end they will reach a compromise with you once they have found a replacement buyer. This is especially true if you are dealing with a reputable builder. They don't want their name tarnished over $5,000. Hang in there a bit and don't sign anything to release the money. Make them have to sue you to get the money. But you have to have patience waiting and patience will pay off. Thing usually work out in your favor in the end, especially now when the inventory is low. They should have no trouble finding a replacement buyer.
0 votes
Jeffrey Sand…, Agent, Los Angeles, CA
Thu Sep 20, 2012
Did you have an agent representing you? Were your contingencies removed? You really need to involve your agent and their broker. If it was a dual agency then your case could be strengthened. If all contingencies were removed yet a material fact is disclosed or discovered afterwards, you should have a good claim to have your deposit returned. Furthermore, even if you removed your contingency, if the seller has not provided all of the statutory disclosures you may also have a case for the return of your deposit.

Consult your agent, their broker and consult a real estate attorney to determine your rights.
0 votes
Sang and Son…, Agent, Los Angeles CA 90069, CA
Thu Sep 20, 2012
Many buyers sign up with a developer to purchase new construction. The developers have their own addendums and contracts that are skewed towards the seller. It's hard to advise without seeing your contract but the best bet is to hire a real estate attorney to review your contract and see if you can get your deposit back.
0 votes
Carla Pennin…, Agent, Georgetown, TX
Thu Sep 20, 2012
This question goes beyond the scope of Realtors answering the question. It is definitely a question to be asked of an attorney who specializes in real estate law.
0 votes
Douglas Perez…, Home Buyer, Los Angeles, CA
Thu Sep 20, 2012
If you could document your findings and the misleading, even if contingencies were removed in your purchase contract, you are entitled to your earnest money deposit. Consult with a real estate attorney for advise.

Do you have an agent representing you in this?

http://plpc.info/askalawyer
0 votes
Cindy Davis, Agent, San Diego, CA
Thu Sep 20, 2012
I agree with the below comments. It's hard to advise when there are details missing.

Do you have a Realtor? If not, you may way want to consult with a Real Estate Attorney. Was the disclosure about fire safety in writing or verbal" (You always need everything in writing)

Do you have a contingency period to the contract and are you within that time period or after it lapsed?

The answers to these questions all impact your choices. If you have a Realtor, then have the fight for you. If you were silly enough to buy without one, then I recommend finding a good real estate attorney.

Good luck.
0 votes
Eric H. Wong , Agent, Albany, CA
Thu Sep 20, 2012
Do you have an agent? What is your agent telling you?

It might be time to consult with a real estate attorney.
0 votes
Jane Peters, Agent, Los Angeles, CA
Thu Sep 20, 2012
Without seeing the contract there is no way of knowing what contingencies were in effect. It would seem that a month into escrow contingencies would have been removed. Due diligence should have been during during the course of escrow before you removed any and all contingencies. You will need to discuss this with your Realtor®
0 votes
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