When I started getting into trouble I became pretty acclimated to legal procedures. Calling my attorney and working out bail was just another way to spend a Saturday night. Unfortunately, the stiffer the charges, the more difficult it was to talk my way out of a bad situation. After so many charges, I found myself slapped with a long jail sentence, and I realized that I wanted to turn things around. Fortunately, my lawyer was able to walk me through yet another process, so that I could make the right changes. My blog discusses how to emotionally cope with legal issues so that you can start living a good life.
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When you accept an offer on your home, it is with the expectation that it will result in the home being sold. Unfortunately, the buyer has to sometimes back out of the purchase of a home. When this happens, you could possibly keep the buyer's earnest money as compensation for cancellation of the contract. If you are selling your home, here is what you need to know about keeping the buyer's deposit.
Review Your Purchase Agreement
The purchase agreement between you and the buyer most likely has contingencies. Before you make any moves toward keeping the earnest money, you need to know if there are any contingencies that could prevent you from doing so.
If there is a contingency that fits the buyer's reason for backing out, such as a home inspection contingency, you can attempt to negotiate with the buyer to keep the purchase on track. However, if the buyer is unwilling to negotiate and wants to back out, you will have to return the earnest money.
Contact the Escrow Holder
The escrow holder can be useful in situations such as these. He or she has been involved in potential purchases in the past that did not result in the transaction being completed. As a result, the holder can inform you of the procedures that need to be followed to make a claim for the earnest money.
The procedures can differ by state. Some states have complicated steps involved, so work with your real estate attorney to get through them. If there is a reason that the holder cannot turn over the funds to you, he or she can explain so that you can take further legal action to receive the funds.
File a Lawsuit
Although the idea of going to court might not be agreeable to you, it is likely your best option if the buyer is refusing to acknowledge your right to the earnest money. Going to court can be expensive and time-consuming, so the buyer might be willing to negotiate with you.
If you are open to negotiations, it is important to realize there is a possibility that you will not receive all of the earnest money the escrow holder has. However, receiving some of the funds could be a victory.
To discuss ways you can protect yourself in the future and to further explore your options for keeping the earnest money, talk to a real estate attorney like Hornthal Riley Ellis & Maland LLP.
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