Friday, August 14, 2009

Defaulting Buyers May Lose Deposits

In the last few months, I have had three incidents of buyers defaulting on purchasing my listings. In each case there was an earnest money deposit held in escrow at a title company.

Case #1: Buyer defaulted because he said he did not want to own three properties.
Case #2: Buyer defaulted because he wanted to pay $10,000 less than the contract price the day before closing.
Case #3: Buyer defaulted because he found a new home he wanted to buy instead of my listing.

There was no provision in any of the contracts that stated, “Buyer may decide to cancel the contract at any time for any reason with no penalty".
In the first two cases, the buyers’ agents told me they informed their buyers they would probably lose their deposit. It was clear that there was no contingency allowing the buyer to walk away, and the buyers knew that.

In Case #3, however, the buyer’s agent became an advocate and demanded the buyer’s deposit back. He knew my seller was contacting an attorney, as he had called the buyers directly to inform them. The agent stated that although the buyers did not want to complete the purchase, they were worried about my seller’s legal intentions. He said they could dig for another provision and get back their deposit later. He defended them and asked what we could do to resolve the matter. I told him I was not an attorney, and would not argue back. You see, I don’t mind negotiating price and terms for the sale of real estate...But I certainly don’t negotiate about someone’s legal rights in keeping deposits.

Do you?

It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: [email protected]

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