buyers want earnest money back after submitting an "as is " offer on house in escrow. can they get a refund of deposit?

Asked by Lou, 93940 Sun Jun 3, 2012

Help the community by answering this question:

+ web reference
Web reference:

Answers

13
Anna M Brocco, Agent, Williston Park, NY
Sun Jun 3, 2012
What is your agent advising...much will depend on your contract, therefore review the document, also consider consulting with your attorney....
1 vote
Lance King, Agent, San Francisco, CA
Wed Oct 31, 2012
You have some good information below. To sum up, essentially it comes to this:

an as-is offer does not mean they can't back out on an inspection contingency
buyers can back out during the inspection contingency for pretty much any reason they want

the buyers' deposit can only be returned to them if seller(s) and buyer(s) both sign cancellation papers, but if they were inside their inspection contingency period and hadn't signed off you are likely wasting your time trying to keep it.
0 votes
Myriam & Pat…, Agent, Carmel, CA
Wed Oct 31, 2012
There are more elements to an "inspection contingency" than just the physical condition of the house. The buyers also have the right to review disclosures and investigate lots of factors that may influence their purchasing decision that are not visible to the eye and have nothing to do with the structural integrity of the building itself--factors like nearby environmental hazards, local zoning/permit regulations, presence of nearby registered sex offenders, school district policies, a neighbor's fierce dog, a past insurance claim on the property, a cloud on the title history, noise or traffic at certain times of the day or the week from a nearby church, theater, bar, construction site, etc....all of these fall into the realm of what the buyer can "inspect."

So if the buyer's agent has included an "inspection contingency" in the purchase contract, the buyers SHOULD be able to find SOME grounds for getting out of the contract without risking their deposit during the "inspection contingency" period.

The seller does not get to judge the "worthiness" or "validity" of the buyers' stated reason for withdrawing from the contract during the inspection contingency period....but the buyers should be careful not to do or say anything that would leave them open to an accusation of acting "in bad faith," which could complicate the picture.

So it's fine for the agent to say, "My clients decided the street is too busy" or "The wife decided it's too far for her to walk to the store" -- but should NOT say, "My clients had no intention of really buying...they just wanted to see how low a price the seller would accept."

If you'd like, we'll be happy to discuss in more detail how the contingencies process works, in regular sales, in short sales and in bank-owned "REO" sales.
0 votes
Robin Stelle, Agent, Carmel, CA
Sun Jul 8, 2012
An "As-Is" purchase means that the buyers understand the sellers will not do repairs. However, it does not mean that the buyers must accept the property if during their inspections they discover that there are problems with the home beyond what they are willing to deal with after purchase. The inspection contingency period protects the buyers earnest money deposit. If during the contingency period the buyers change their mind about the purchase, then yes, they are entitled to a refund of their deposit. Most contracts require an active release of contingency meaning that the buyers must sign a specific contract form releasing the contingency. The contingency is in effect until the buyers sign the release or the sellers cancel the contract for non-performance. However, many bank owned purchase contracts that the banks require the buyers to sign in addition to the local real estate contract they used to submit their offer, will contain a passive release of contingency. This would mean that after the specified contingency timeline expires the contingency is no longer in effect and the deposit is no longer protected. It is important to read the contract carefully.
0 votes
Lance King, Agent, San Francisco, CA
Mon Jun 4, 2012
As pointed out below, there isn't enough info here to answer this question - depends on where you are with regards to inspections. Even if someone agrees to buy as-is, that does not mean they can't get inspections and cancel if they don't like what they find out. Ask your agent.
0 votes
Cindy Davis, Agent, San Diego, CA
Sun Jun 3, 2012
If it is within the 17 day (or whatever time frame the contingency period is), buyers can get their deposit back. There is a cancellation form to complete where you ask for your deposit back. I hope you have a Realtor who is assisting you with this.
0 votes
Pete Gamble, Agent, Salinas, CA
Sun Jun 3, 2012
Unusual but possible. If the buyer obtained 100% financing for the purchase and the seller has agreed to pay for all of the buyers closing cost, then the deposit could be returned to the buyer upon close of escrow.
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Jun 3, 2012
Has anybody sat down with them and asked them what it would take to keep the deal together?
The Sellers do want to sell the place, right?
0 votes
John Brooks, Agent, Virginia Beach, VA
Sun Jun 3, 2012
That depends. If the offer is ratified and is a contract and the seller fail to perform on the contract the EMD will be returned and the buyer can go to the seller for any cost incurred preparing to carry out the buyers contractural requirement. However if there is no contract, and only an unratified offer that is withdrawn before it is fatified by all parties then the deal is off and EMD can be returned. Providing there are no special broker agreements
0 votes
John Souerbry, Agent, Fairfield, CA
Sun Jun 3, 2012
Yes, they can get their deposit back for just about any reason if the contigency period has not expired.
0 votes
Eric H. Wong , Agent, Albany, CA
Sun Jun 3, 2012
Have the buyers released their contingencies? If not, and they have found, through their investigations, that there is something about the property that they cannot live with, then yes, they can cancel their offer, and get their deposit back.

Just because a property is being sold "as is" does not mean a buyer does not have the right to fully inspect the property, and reject it, or renegotiate the terms if they find something that was not disclosed, and they have an inspection contingency.
0 votes
Edith Karoli…, Agent, Winnetka, IL
Sun Jun 3, 2012
In order for us to respond we would need a lot more information. In a case like this it is really important for read the terms in the contract if you have a mutually agreed upon written and signed sales contract..... if you are working with a Realtor he or she can advise you based on the terms of
the sales contract, or better yet contact an experienced Real Estate attorney to give you the best advice based on the terms in the written and signed by both sides contract.....

Even if you offer a home as is, if the buyer is working with a good Realtor, then the buyer would be recommended to have an inspection of the as is home, to make sure that they want to accept the as is condition, and there could still be terms in the final sales contract that give the buyer the opportunity to have an inspection, so that they can decide whether they want to buy the home AS IS with knowing what needs fixing over time, or if they find out a major problem they can get out of the contract....

Therefore the terms of the contract will determine what happens.....

Good luck to you!

EdithSellsHomes@gmail.com
YourRealtor4Life! Working always in the very BEST interest of her clients, buyers, sellers and
investors alike.
Covering the city of Chicago, all N an NW suburbs and the fine Homes of theNorthShore for
@Properties Northshore, 30 Green Bay Road, Winnetka, Il. 60093
Edith always goes the X-tra Mile with a SMILE for all her clients, she also covers with her
partner agent all states in the US and worldwide properties as well
Edith speaks French, German, Spanish & more
0 votes
Christopher…, Agent, Methuen, MA
Sun Jun 3, 2012
Was their offer accepted? Were there any contingencies in the offer? More information is needed to answer your question.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more