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Old 03-16-2013, 12:00 PM   #1
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In what situations would I get my earnest money deposit back?


I signed a P&S Agreement and it said it had a non refundable earnest money deposit. In what circumstances could I get it back? It was for $5,000. I signed it because I'm very serious about the house but now that I've been thinking about the worst scenario that could happen. This is a for sale by owner property so there is no real estate agent involved.

Also their is a fourth page, but its just all the signatures, but at the top I put that contract is subject to appraisal.

The link is to my flickr and my P&S is there.

Tell me in what scenarios that I would be able to recover my deposit


http://www.flickr.com/photos/94104880@N04/

Also I found out that the seller already cashed in my nonrefundable earnest money deposit, did he have the right to according to the agreement? He has his own company in the area and is very reputable.


Last edited by johnsorious; 03-16-2013 at 12:05 PM.
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Old 03-16-2013, 12:36 PM   #2
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In what situations would I get my earnest money deposit back?


You need a legal forum, this is a do it yourself chat room. What possible use are you going to make of "answers" you get here?

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Old 03-16-2013, 12:39 PM   #3
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In what situations would I get my earnest money deposit back?


Quote:
it said it had a non refundable earnest money deposit.
Ayuh,.... My guess is ya shoulda thought more, Before ya signed a NON-REFUNDABLE deposit...
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Old 03-16-2013, 12:59 PM   #4
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In what situations would I get my earnest money deposit back?


It's for sale by owner, but there's no reason YOU can't have a real estate agent. These are EXACTLY the types of things they're good for.

That said, and take this with the fact that I'm neither a lawyer or agent, our agent told us that pretty much anything found on a home inspection that wasn't disclosed prior to the P&S is typically grounds to negate the contract and return the deposit. A lot easier when there's agents involved though. Kind of crazy to sign a contract of that magnitude without a lawyer, IMO.
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Old 03-16-2013, 12:59 PM   #5
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In what situations would I get my earnest money deposit back?


Real estate lawyers aren't to costly---they will cover your butt----
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Old 03-16-2013, 01:05 PM   #6
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In what situations would I get my earnest money deposit back?


If you signed a document saying its not refundable your out of gas. Unless there is a stipulation clause saying you can get it back under certain situations.

Contract law 101
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Old 03-16-2013, 01:05 PM   #7
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In what situations would I get my earnest money deposit back?


Although this form is different from the ones I use the legaleze is the same.

It does say non refundable deposit, but it also states that it will be returned for non acceptance of this contract.

I see two possible "outs' for you if you so choose. Clause 12 and Clause 14

Clause 12 states that the results of the inspection are up to the Buyer in his sole and absolute discretion. With the deposit returned in full.

The financing clause says the same thing. I'd need to have a second look at it, but there is an out for sure.

I have great difficulty with the finacing clause with the star beside it. In no way should you accept the terms of the financing set out by the Seller. Its not his business what your interest rate or your amort terms are.

edit:

Clause 14b states that if you don't get the loan the Seller MAY terminate the agreement and the deposit SHALL be returned to the buyer.

In the future ....cross off..do not accept ...clause 14d This clause allows the bank and the Seller to communicate directly about your financial status...not good. If that were the case you will not be able to back out of a contract if you want to use financing as an "out". Plus, again. not their business

Last edited by creeper; 03-16-2013 at 01:29 PM.
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Old 03-16-2013, 01:17 PM   #8
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In what situations would I get my earnest money deposit back?


Check on the missing page for a clause that says something to the effect that all pre printed provisions and clauses will be superseded by any written in. I didn't see one so that is in your favour.

Also, don't be alarmed that the cheque has been cashed. If the closing is for any lengthy period the interest shall go to the Buyer. Normally how the cheque is to be held is addressed in writing also
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Old 03-16-2013, 04:26 PM   #9
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In what situations would I get my earnest money deposit back?


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Originally Posted by Bondo View Post
Ayuh,.... My guess is ya shoulda thought more, Before ya signed a NON-REFUNDABLE deposit...

I believe the non refundable deposit reference's the deposit is non refundable if you allow the agreement to go into default.


If you terminate the contract within the provisions and conditions stated herein then the deposit shall be returned in full without penalty
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Old 03-16-2013, 05:11 PM   #10
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In what situations would I get my earnest money deposit back?


the ernest money is to pay the seller for their trouble of tying up the home so they get something out of it if you do not hold up your end of the sales contract. the only way you can get your ernest money back is like the home is unsound the bank won't lend on it. Te did not disclose in good faith things like that. out side of that happening buy the home.
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Old 03-16-2013, 05:21 PM   #11
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In what situations would I get my earnest money deposit back?


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the ernest money is to pay the seller for their trouble of tying up the home so they get something out of it if you do not hold up your end of the sales contract. the only way you can get your ernest money back is like the home is unsound the bank won't lend on it. Te did not disclose in good faith things like that. out side of that happening buy the home.
Correct..if he does not hold up his end if the contract.

But in his contract it is stated that the Buyer has sole discretion in the interpretation of the inspection. It says nothing about the Seller being able to remedy the situation therefore it can be anything the Buyer wishes it to be. He need not disclose the nature of the defect. There is no provision for that.

Also the financing clause allows for him to terminate the contract. Not as easily though because clause 14b.

At any rate the contract is a mess...missing signatures and unchecked boxes.

Buy it if you love it. Kill it if you have cold feet. Be sure to terminate the contract within the terms that you agreed to or you WILL be on the hook for the 5k
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Old 03-16-2013, 05:36 PM   #12
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In what situations would I get my earnest money deposit back?


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Correct..if he does not hold up his end if the contract.

But in his contract it is stated that the Buyer has sole discretion in the interpretation of the inspection. It says nothing about the Seller being able to remedy the situation therefore it can be anything the Buyer wishes it to be. He need not disclose the nature of the defect. There is no provision for that.

Also the financing clause allows for him to terminate the contract. Not as easily though because clause 14b.

At any rate the contract is a mess...missing signatures and unchecked boxes.

Buy it if you love it. Kill it if you have cold feet. Be sure to terminate the contract within the terms that you agreed to or you WILL be on the hook for the 5k
I just blanked out all the things that aren't necessary to reveal, names.

So basically if inspection reveals something serious to repair, or appraisal doesn't check out, or bank won't lend me money I can get my deposit back even though it says non refundable.

If I just don't want the property then I lose out on 5k. If it didn't say "non refundable" then I could back out for any reason and recover my earnest no matter what, correct?
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Old 03-16-2013, 05:58 PM   #13
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In what situations would I get my earnest money deposit back?


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I just blanked out all the things that aren't necessary to reveal, names.

So basically if inspection reveals something serious to repair, or appraisal doesn't check out, or bank won't lend me money I can get my deposit back even though it says non refundable.

If I just don't want the property then I lose out on 5k. If it didn't say "non refundable" then I could back out for any reason and recover my earnest no matter what, correct?

I realize you blanked out names for privacy purposes, but its still messy. I see unchecked boxes and missing initials or signatures. Doesn't matter at this point because you have an out.

Obviously contracts are not supposed to be broken just because you've changed your mind...a lot of grief and wasted time for everybody, but it happens all the time. Personally, I like to include as many conditions as possible in the event the buyer needs out. But it also needs to be as 'clean' as possible

In this contract it says nothing about the inspection results being 'serious' The defects are in your sole and absolute discretion. It can be anything you want it to be. You need not reveal the defects you uncovered, but you can be sure they will ask you. The deposit shall be returned to the buyer within the terms you agreed to. That bit is blacked out, but make sure you don't go past that date.

What ever you do make sure you DO IT IN WRITING.. or it means nothing

You are correct that nonrefundable means that if you back out of the deal for just any old reason you don't get the deposit back.

As an unrelated aside....resale homes are full of defects that cost more to repair then the buyer anticipated....hint hint
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Old 03-16-2013, 06:55 PM   #14
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In what situations would I get my earnest money deposit back?


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I realize you blanked out names for privacy purposes, but its still messy. I see unchecked boxes and missing initials or signatures. Doesn't matter at this point because you have an out.

Obviously contracts are not supposed to be broken just because you've changed your mind...a lot of grief and wasted time for everybody, but it happens all the time. Personally, I like to include as many conditions as possible in the event the buyer needs out. But it also needs to be as 'clean' as possible

In this contract it says nothing about the inspection results being 'serious' The defects are in your sole and absolute discretion. It can be anything you want it to be. You need not reveal the defects you uncovered, but you can be sure they will ask you. The deposit shall be returned to the buyer within the terms you agreed to. That bit is blacked out, but make sure you don't go past that date.

What ever you do make sure you DO IT IN WRITING.. or it means nothing

You are correct that nonrefundable means that if you back out of the deal for just any old reason you don't get the deposit back.

As an unrelated aside....resale homes are full of defects that cost more to repair then the buyer anticipated....hint hint
Alright this gives me some relief. Thanks.

I was just reviewing my agreement earlier today and realized it said "non refundable" for the earnest money deposit. At that moment I thought about the worst case scenario and thought I was screwed.

From what I get out of this is that if I back out for no good reason I lose my 5k. But if I have a legitimate reason then I can recover it, correct?
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Old 03-16-2013, 07:06 PM   #15
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In what situations would I get my earnest money deposit back?


Correct, but your legitimate reason best fall within the home inspection area.

Please see a lawyer of your choosing. Be firm with your lender or just go ahead and get a second opinion from your own lawyer.

You are under time contraints, don't waste it

Good luck

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