Hi,
Don’t know why am I coming across all these problems. Here is what is happening now. Buyer signed a contract last Tuesday to purchase a new house that I just finished. He puts down 3000 earnest money. This Tuesday I get a call from my Agent saying that the Buyer wants out. He also wants his 3000 earnest money back. His reason is that he received an at work email about re-organization of some DOT departments. When was the last time a state employee got laid off?
History about the buyer. I was at the site, when the buyer walked in with his agent, and he loved the house. Right after the meeting he calls me and asks me to lets fire both of our agent to save. I said this is wrong, and advised him to not do that because its not fair. He made me lower the price of the house from 344900 to 330000, and now the above situation. What should I do? Don’t pay their earnest money and enforce the sale? If they refuse take them to court? Help please
Thank you in advance
P.s.”some pictures of the house are attached.”
Replies
I'm not sure what part of "earnest money" Mr. Slim E. Ball doesn't understand, but t'were me, i'd keep the earnest money - that's easy - and let him out of the contract since it's usually contingent on finding financing and i'll bet that wouldn't happen for some reason or other now anyway. You're $3K ahead of the game - yay! I'd make sure the agents learned in the process what the guy tried to pull behind their backs so that you become a favorite client and your realtor puts his ba back into getting the house sold without your having to go to court.
Also, besides ethics, if you have gone ahead and agreed to Slim's plan, both of your agents could have sued you for their commission anyway, bec they showed the house and they have a contract that talks about such double-dealing.
Quit whimpering about him making you lower the price, though; that's so bush-league.
Thanks splintergroupe for your reply. I let my Agent know what he wanted to do. He had not signed a contract with his Agent at that time. I am not whimpering, just stating that I tried to work with them. One reason that I am little pissed is that I planned a vacation to Europe when this was going to be sold next week, but now ...
Edited 11/1/2007 2:28 am ET by 1Builder
Edited 11/1/2007 2:29 am ET by 1Builder
Edited 11/1/2007 2:30 am ET by 1Builder
The last house i sold, the buyer and i made up our own contract, signed it, then drank a pitcher of margaritas. I carried it for a couple years for her without a hitch before she refinanced. The sale before that almost ended in tears bec the other guy tried to chisel a few hundred more bucks out of me at closing. He's the neighbor now, but he's being very nice bec i caught him in a forgery of a POA that his wife notarized. The sale went through just fine after that revelation, LOL.Europe will still be there. Buy your tix yet?
"One reason that I am little pissed is that I planned a vacation to Europe when this was going to be sold next week, but now ..."OK, quit whimpering about missing out on the European vacation then;)The exchange rates will kill you right now anyways
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"He had not signed a contract with his Agent at that time."
I'm confused - If there's no contract, why did they put earnest money down?
Like SG said - If their offer was subject to financing, they're likely gonna find a way to NOT get financing to get out of the deal. No sense beating a dead horse.
Let it go and move on.
Bumpersticker: Do unto others before they do unto you.
Buy 5 minutes of a lawyer's time and find out if you have a legal right to keep the 3K.
I agree. My question for you, sms: in broad strokes, what are factors that would indicate it can be kept? should be refunded?My only gripe with the OP (nice house, btw) is "He made me lower the price of the house from 344900 to 330000." He didn't "make" the OP lower the price. They negotiated. And in this market, 349 to 330 is not such a bad hit to take. I snooped around the listings for my old neighborhood. The last house sold there, which looks somewhat similar to this one, sold in early July for 490 after being first listed 30 days prior for 649.
what are factors that would indicate it can be kept? should be refunded?
It depends entirely on the terms of whatever was signed.
Thanks. So as jesse says, it all--not surprisingly--comes back to the contract.
coincidentally, that 5 minutes will cost him....3000$.
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I have Transcended the need for Pants....oooohhhhmmmmmm......
""He had not signed a contract with his Agent at that time."I'm confused - If there's no contract, why did they put earnest money down? "He had a contract with the seller to buy the house. That is why put down the earnest money.At the start of the process he did not have a contracto with HIS RE agent to act as a buyers agent so he had not responsibility to see that he was paid. Whether he ever signed a contractor with the buyers agent is unknow and not a concern here.The only that it has to do with the discussion was show the character of the buyer that he wanted to try and bypass the agents and get the house at a lower price..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
This was his first time when he came to see the house. I told him that I will not do what he was thinking, and advised him to sign the papers with his Agent. he gave us his first offer, which I rejected. Then he came with second offer, which I accepted. My Agent did give me advise, but I value this board's advise as well.Thank you all for your inputs, and I will let you know what happens next. I will find out by next Monday.House is located in North CarolinaEdited 11/1/2007 9:49 pm ET by 1BuilderEdited 11/1/2007 9:51 pm ET by 1Builder
Edited 11/1/2007 10:03 pm ET by 1Builder
>House is located in North CarolinaIn what part of NC? W-S area myself. Used to be Asheville.
Raleigh
i'd keep the earnest money
Problem is, it's NOT easy - you can't sell the house without a release from him, which he probably won't sign unless you return the earnest money. So you give him back his money, or you basically can't sell the house.
At this point, i'm guessing the earnest money check was made out to the buyer's "agent" with whom the buyer has no actual contract.
I'm also guessing the EM check was to hold the house long enough for the buyer to see if he couldn't do the end run around the agents. He didn't count on an honest seller, but i'll bet this scheme has worked for the buyer before to get the RE agents to do the leg work for him and get the seller hooked, then ditch the agents.
Well, this is going to be one of those 'hard knock' lessons, eh?
Edited 11/1/2007 3:23 pm by splintergroupie
When Realtors or other escrow agents are involved, that makes it even harder - they want a release before the give back the money, in my experience.
Actually, at least here in MT, a real estate agent cannot write a buy/sell until they have a signed contract with the buyer that establishes a Buyer Broker relationship. This ALL depends on the state. Here, nobody needs to sign anything to "release" the earnest money to the seller if the buyer defaults. On the other hand, we DO need to get a release from the seller to distribute earnest money BACK to the buyer upon the buyer's exercising of a contingency. TALK TO YOUR REAL ESTATE AGENT. This is exactly what they are for.
<<a real estate agent cannot write a buy/sell until they have a signed contract with the buyer that establishes a Buyer Broker relationship>>You'd think, but i'm just going by what the seller said in post #3 that the buyer had no signed contract with the agent, so there's more than one hinky thing about this. Your advice to TALK TO YOUR REAL ESTATE AGENT is only as good as the agent. The buyer's agent isn't exactly a pro at this, obviously, and i have to wonder about the seller's agent, too, since he's coming here to get advice. I hope the builder gets his $3K, if only to give a lesson to Slim and maybe shut up the peanut gallery criticizing his work.
i'm betting that, if true, is a matter that varies greatly by State.
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i'm betting that, if true, is a matter that varies greatly by State.
Definitely, and I should have mentioned that. Sorry.
It may be a matter of what you meant and how I read your words too. What is on my mind there is that if the situation were mine, in this state, there is nothing that would STOP or prevent me from selling it to another buyer as soon as he writes me a letter asking to be out. but if he has some verifiable reason to believe he still has some rights in the house or claim on me, little would stop him from later filing a claim in court that I had sold his house, etc.
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Consult your lawyer. I don't know how you can enfore a sale.
I'd keep the earnest ( that is what it is for ) and let him go.
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I'd keep the earnest ( that is what it is for ) and let him go.
Thats easier said then done. Often times there is some contingency in the contract that allows one to get out of the contract.
I myself never write a contract without an OUT, whether it be contingent upon final inspection, financing,..........
I do agree to let the guy go, not worth the hassel. If one guy was interested so will another.
Doug
I would never accept a contract WITHOUT earnest.That was once a principle of all contract law. Without the exchange of something of value, there is no contract. If I am spending time to meet and sign, then to take the thing off the market and deter other potential customers, I have a cost in this agreement to sell.
I might also have paid a non-refundable deposit to go on a European cruise based on this buyers promise to buy my house....Lot of costs can be incurred and some automatically incurr immediately upon agreeing to sell. There is a reason for earnest money
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I would never accept a contract WITHOUT earnest.
And earnest money is often times refundable! NOWHERE did I say there wasn't earnest money, you assuming facts again that aren't there?
Earnest money does not automatically belong to the seller just because its called earnest money. Your offer of a definition of what earnest money is does nothing to prove it belongs to the seller - Plus I already knew what earnest money was!
I just recently bought a house, I had $5000 earnest money down, up until the final day before closing I could have backed out and I would have got my money back, Of course that's the way that I worded the contract but I'm not the only guy that knows how to do that.
I have to wonder about laws in other areas but also about people saying that the money is automatically the HO's. We haven't seen the contract but I'd guess there is an out in it somewhere and that OUT would get the buyer his earnest money back.
Another example, We recently sold our house in TX and the buyer offered $1000 in earnest money. I wasn't thrilled with the amount but didn't want to lose a buyer so I gave them 10 days to do any inspections, financing, or anyother thing they thought necessary and after that there was no way to back out. Since the home was being purchased by the father for his daughter and the guy was talked about highly by his banker I felt comfortable when they excepted my terms that the house would move forward. Closed on the house 30 days after the signed offer.
Doug
Edited 11/1/2007 9:56 pm ET by DougU
Because of this thread, i spent some time reading MT state law about earnest money and found that there is no contract without earnest money being paid; the buy-sell is no more enforceable than a love note without the buyer coughing up some money. I thought that was kind of odd, actually.
there is no contract without earnest money being paid
Are you suggesting that the earnest money belongs to the seller regardless? I agree with the idea that money has to change hands but that doesn't mean it cant go back to the buyer.
I've bought a house with as little as $100 earnest money. Of course that was 31 years ago and the house cost $12,000.
Doug
Edited 11/1/2007 9:49 pm ET by DougU
<<Are you suggesting that the earnest money belongs to the seller regardless?>>No, i'm just saying that the state doesn't consider a contract exists unless the buyer puts earnest money down, which goes into an interest-bearing account trust account. Earnest money that a seller has received when the buyer backed out have been returned to the buyers in District Court cases, and legal fees awarded the buyer as well!I thought the case presented here looked pretty solid for the seller when i responded at Post #2, i'll admit.
<<Are you suggesting that the earnest money belongs to the seller regardless?>>
No, i'm just saying that the state doesn't consider a contract exists unless the buyer puts earnest money down, which goes into an interest-bearing account trust account.
OK, I get it! I believe that that is the way it is here in Iowa, pretty sure that most/all contracts are executed in that manor.
Doug
All terms, including earnest money are negotiable. Time and circumstance can make what seems to be a weak offer very strong.I would have taken $1 earnest money on my condo in MI. It wouldn't have bothered me at all if they wanted 90 days to close and backed out of the deal on day 89. It wasn't selling anyways!
FKA Blue (eyeddevil)
Keep the money, forget about enforcing the sale. Did he deposit the money into escrow or is it just a personal check to you? If a check you might wanna go cash it.
Hi,Thank you guys!After reading your posts here is what I will do .1 - Keep the earnest money
2 - Don't weary about forcing them to buyIn contract it says if they default then I get to keep the money. I see only one condition, which says they have to obtain a conventional fixed loan under 6.5%. they had told me that they were pre-approved for a loan.
Nice looking place but I'm getting a good chuckle out the grand entry. The visitors have to descend on foot from the driveway in order to climb the majestic stairway.
If that isn't McMansion architecture, what IS? ROFL.
An old friend of mine built a place which is meant to resemble an old southern mansion. Every time I visit him, I get down on my knees before ringing the doorbell. When he opens the door I clasp my hands together in front of my face and with a pitiful voice cry out, "Oh please massa, can I come in de big house?"
I'm sure he looks forward to your visits more every time he finds you kneeling there!;)notice you and I have agreed on things twice in this thread?
once on the earnest money and once now on the style of the house. Notice where the water will run from the driveway?
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Notice where the water will run from the driveway?
Yep. Living at a latitude where freezing rain is a common winter phenomenon, that was the first thing about that photo to catch my eye.
Regarding the friend with the phoney antibellum estate, he and his wife have a great sense of humor about "Tara". They even asked me to record the out going message on their answering machine some years ago. That was done as a snobbish British butler.
Since the OP didn't submit the photos for purpose of critique, I'll withhold all my thoughts on the place. hope he gets lucky.
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I was wondering too why the walk from the driveway goes down and then the very expensive stairs go back up three or four risers to get back to where a level walk would be.
Has pretty good curb appeal however. I wouldn't really call it a McMansion but we see nothing of the surrounding neighborhood which is the best indicator of scale and "fitting in".
Runnerguy
That made me laugh out loud!!
The part about kneeling on your friends door step that is.
Legal Disclaimer: The preceeding comments are for entertainment purposes only and are in no way to be construed as professional advice. The reader of these comments agrees to hold harmless the poster, EJCinc, from any and all claims that EJCinc offered professional advice, ideas, or comments to the reader that may or may not have resulted in the damage, injury, or death to the readers property or person.
Edited 11/2/2007 11:54 am ET by EJCinc
His extended family and many friends have been kidding he and his wife about the design of that house, ever since the stately columns first arrived on the truck. They both enjoy the humorous aspects of it.
Buyers back out of closings all the time for thousands of various reasons.
Aside from losing a sale (you lose one of those every time a potential buyer doesn't make an offer), what damage has been done? Did you turn down any other offers?
This sounds like buyers remorse and nothing more. Personally, I wouldn't want to go through with the sale of anything I own unless I knew the buyer really wanted it. The repercussions later aren't worth the potential headache.
Force the buyer to perform? Ever try squeezing blood out of a rock? Dont even think about it unless you know this guy is flush with cash and doesn't have enough sense to get representation after you file the suit. Even then, the judge will likely order him to get a lawyer.
If you haven't incurred any costs, I'd just return the check and move on. Life is too short.
FKA Blue (eyeddevil)
If you haven't incurred any costs, I'd just return the check and move on. Life is too short.
I don't agree about returning the $3,000. That money was paid to take the house off the market and ensure the buyer of the price he'd negotiated for himself. The buyer forfeits that money when he fails to complete his obligations under the contract.
Sure, I'd let the buyer out of the contract but return the earnest money...no way.
There is some misinformation in this thread.There is only ONE determining factor regarding if you should keep the earnest money or not: what does the CONTRACT say? Either he has contingencies he can exercise or he doesn't. It's pretty simple.And Piffin, consideration doesn't need to be $$$. In other words, at least in Montana, you can write a Buy/Sell (i.e. a purchase contract) without earnest money.
Edited 11/1/2007 12:20 pm ET by jesse
"And Piffin, consideration doesn't need to be $$$. In other words, at least in Montana, you can write a Buy/Sell (i.e. a purchase contract) without earnest money."Re-read what I said - that AT ONE TIME it was not possible to have a contract in effect without the exchange of something of value.It has come about that with the rise of our credit society, the mere PROMISE is regarded and accepted as having some value, if it is accepted by both parties.That above just to clarify what I didn't feel like writing out in digital longhand this morning.I do agree with you that the details of his sales contract supercede anything we or general principles might say. but in absence of that document before me, my advice remains based on what has been said - to keep the moola!
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There is one point that everyone seems to be missing.
He came to you to try and cheat his realtor and your's out of their commission. That would have been a deal breaker for me. I would never have done any business with a guy who has shown me that he's a crook. Just asking for trouble. And now you've got it. If you give back the money your out your costs. If you keep the money he could sue you and tie up any future sale of the house for months.
Also, I wouldn't spend any money from any deal until it's in the bank. -- And the check has cleared.
If the buyer signed the contract then you both have to abide by its terms. Earnest money makes sure that honest people are earnest, and that slime-balls like this guy can't pull the same stunt with someone else a week later.
Nice house,
I went through something similar (the buyers sale of his home fell through and he tried to get out of the contract, but then found another buyer and bought the house.)
But your forgeting the rights of the buyer. If you were going to keep my $3k I wouldn't sign out of the deal. In NY the buyer can have 30 days to get his ducks in a row, before he even starts to do anything. Basically he has 30 days to find a lawyer, he can ask his lawyer to go as slow as possible, etc. etc. etc. after 90 days he can screw up the mortgage paperwork, get denied and get his $3k back.
In the mean time you can't put your house back on the market because you have a contract on the property. So you will end up paying taxes, interest (if you have a loan) and probably legal fees.
You are in the right and I feel you deserve to keep the money, but the guy sounds like an A-hole and will try his best to keep being one. I would give him his money back and get rid of the headache!
When he signed the deal and put the money down, the $3000 became yours regardless of future events. That's why it's called "earnest money."
You can let him off the agreement but the money is yours now. Normally, the earnest money amount is closer to 5% to 10% of the asking price, why did you accept only $3000 earnest money. I wouldn't have done it for less than $30,000 earnest money then he wouldn't be playing you like he is.
Look at it this way, you took the house off the market and lost all those other potential buyers while he alone had the option to close on the sale. He put the money down to close the deal but then he changed his mind. Your in business to sell and if your prevented from selling then that's a "cost" that you must be brought into the mix for your business succeed. The money is yours and you'd a fool if you surrender it back for any reason. Contact your local lawyer referral service, spend $50 for 20 minute question and answer period with a lawyer specializing in real estate law.
"When he signed the deal and put the money down, the $3000 became yours regardless of future events. "This is the MOST WRONG THING I have ever read here. You should really pipe down since you clearly have NO CLUE how real estate law works.
what are you talking about,most buyers don't have 10% to put down on the house for the mortage,let alone for earnest money. i can write a millon dollar contract around here with 500.00 earnest money and the agents willtake it to the sellers with no problem.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
I agree.It all depends upon the market. FKA Blue (eyeddevil)
"Right after the meeting he calls me and asks me to let's fire both of our agents to save."
That should have been a big red flag as to buyer charactor.
Regarding the $3000 deposit....usually there's some language in the listing contract that the agents (yes both the lister and the seller agent) get like 60% of any forfeited deposits (after all they did find a buyer and have no control over a simple change of mind) so I'd look at that.
Runnerguy
"Regarding the $3000 deposit....usually there's some language in the listing contract that the agents (yes both the lister and the seller agent) get like 60% of any forfeited deposits (after all they did find a buyer and have no control over a simple change of mind) so I'd look at that."Really? Not in this state. Here, the only thing the brokers get to keep is the interest earned while the property is in escrow. And that is even negotiable.
I will talk to my Agent again, and ask her what I learned here.
Regarding the stairs, the slop for the land was bad "almost 12 feet from one corner to the other" Most of you did not pay attention to that, but to stairs, which means the expensive stairs is doing its job. Did a lot of landscaping which cannot be seen in pictures. Sod stops some water, and there is an underground pipe at the left side, which takes the water to a small creek.
Regarding the stairs, the slop for the land was bad "almost 12 feet from one corner to the other" Most of you did not pay attention to that, but to stairs, which means the expensive stairs is doing its job.
Just because we didn't mention the slope doesn't mean that we didn't notice it. It's just not part of the "Magic Castle" humor.
A more direct criticism of the entry would point out that it would be less pretentious and more practical to move the door and foyer over next to the driveway.
To each their own.
Or to reverse the whole plan left to right
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How 'bout calling it "Swale Hollow"? ;)
Well, that's just swell! Owl get the sign painted right up
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Great! While you're at it, maybe you can make up a new sign for an aging development in my county, initially named after the habitat of another native bird but now better known as "Peasant Hill".
I've always wondered why they didn't see that one coming.
Well, as anyone knows all this real estate stuff is state law. I probably could have worded it better as four of the six states I've had real estate dealings in gave the realtors a cut of any forfieted deposits.Basically my point was to look at the contract.And for the OP, $3000 is a paltry deposit for this house. Less then 1%???? Really. If it had been 20-30K I'm figuring the house would be sold and the OP would be off on his planned vacation.Runnerguy
if the buyer has a clause that states" contingent on finacing to be obtained" all he has to do is go apply for a loan,tell the loan officer by the way i may be getting laid off. no loan no contract ,3000.00 earnest money goes back to the buyer because one of the contingencies were not met.
i wouldn't even spend the 5 minutes at a lawyer.the contract is null and void if that clause is in there. larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
You are right, but there should be a date attached to that contingency, just like ALL contingencies.All I know from reading this thread is that almost everyone that has posted NEEDS to find themselves a good real estate professional, because most of you (with a few exceptions) are talking out your ####.This is almost as bad as listening to a bunch of real estate agents talk about construction. Hahahahahahahaha.
i'm sure with the contract only 7 days old that the contingecie would still be in play.usally you have around 30 days to get all your ducks in order. larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
usally you have around 30 days to get all your ducks in order.
The contract can be written any way the signers agree on, but 30 days is a really long time for contigencies. Around here, the norm is 5 days, have never seen more than 10 days.
There is nothing in what you quote that indicates a return of the earnest is necessary should the buyer fail to meet the conditions of the loan
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if the contract is wrote contingent upon buyer obtainig a loan,and he does not qualify for a loan,that means there is no contract .it's over and just a nice peice of paper to wipe with. since there is no contract the buyer gets his money back.
now if it was wrote into the contract that no matter wheter this deal closes or not seller gets to retain earnest monies,fine. but i've never seen that written in a contract.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
"If the buyer has a clause that states" contingent on finacing to be obtained" all he has to do is go apply for a loan,tell the loan officer by the way i may be getting laid off. no loan no contract ,3000.00 earnest money goes back to the buyer because one of the contingencies were not met."If that's the case, why would someone in that position bother to pay the earnest money and go through the motions of getting a loan? What's the point? If they know they won't get the loan, they're just wasting people's time and costing them money.
"I cut this piece four times and it's still too short."
If that's the case, why would someone in that position bother to pay the earnest money and go through the motions of getting a loan? What's the point? If they know they won't get the loan, they're just wasting people's time and costing them money.
Simple, they changed their mind(s).
Not so simple is the reason why they changed their mind. But I can think of several reasons why someone might want to back out of a deal. ( Sudden divorce, job change, big change in the market etc. Lots of good reasons for a buyer to back-out if they can without a big or expensive hassel).
But, he already knew he may be laid off. If I had a clue of this in any way, I wouldn't stick my neck out by buying a house, especially when the monthly nut will be in the $2000 range, plus taxes and insurance. If his wife makes good money, fine but at this point, I don't think many banks will approve that loan unless they're already secure, financially. I was also commenting on someone who knows he'll be laid off, applying and making sure he's denied. That just doesn't make sense to me, other than the guy may be a pr!ck. I guess the best way to deal with selling homes now is finding buyers who are pre-qualified. That particular contingency would be eliminated, so the dealing parties can get on to the nuts and bolts.
"I cut this piece four times and it's still too short."
Yea , I hear what you are saying. I based all of my assumptions on somebody who is able to get the loan, but simply changed their mind and wants out of the deal. "stuff" happens.
Watch out for "pre-qualified" people. There are more "loopholes" or fine -print with pre-qualified than there is with earnest money.
Earnest money and prequalified are simply more pieces of the puzzel. But they aren't the whole thing, you need lots of little pieces.
It seems to me that almost everything involved in a real-estate transaction is sort of "fuzzy" and subject to a lot of fine print.
A savvy and sharp and honest real estate agent (very,very rare) is an amazing person
Oh yea, there are lots of pr!cks in the real estate game. Somehow ya got to be better than them. I know, Iknow, easier said than done sometimes.
It's possible for someone to make offers on several houses with earnest money just to see which one pans out to be the best deal.If I had four properties that I wanted to buy but could not decide, and had >$10,000 cash in hand, I could offer on all four, put up $2,500 each and then have a leisurely 15 days or so to make my final decision.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
highfigh,
my apologies--
i think the assumption is--"buyer" makes offer fully intending to buy house--later changes his mind for any of a zillion reasons--wants out of the deal
simply tells bank" I think I am gonna be laid-off"( this part may be a lie on the "buyers" part)--bingo ,bank turns him down and he is out of the deal
Originally he full intended to buy the house--panics--and a quick lie to the bank get's him out of his commitment.
again my apologies, for re-stating the obvious( you are apparently to honest to cotton on to the devious little finagle there, LOL
Best wishes,
stephen
If I sell this place and I get a buyer who tries to pull this kind of c-rap, they may wake up in the middle of the night with my gloved hand over their mouth and me telling them to not make a sound. Of course I'm kidding. Yeah, yeah, I'm kidding, all right!I would be a lot more understanding if they just tell the truth because I don't tolerate being lied to, by anyone and for a deal like this, where I have strong suspicions that they did lie, they wouldn't get a second chance. "I cut this piece four times and it's still too short."
Edited 11/7/2007 6:32 pm by highfigh
1. to begin with the original poster ,i think he indicated that the day the contract was signed the buyers job was secure,then a week later was told they were looking at making some cutbacks. now if i was the buyer even though i had not been given walking papers i would be able to hear my knees shake on a 300k commitment,and would look at how to get out.when i go to apply for a loan i just tell the loan officer the real story,bought it with a job,now a week later the job may not be there. the loan officer will smile and say"i'll pass" your out of the deal.
2.buyers remorse,who hasn't felt that feeling? larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Edited 11/7/2007 10:15 pm by alwaysoverbudget
did it cost you anything in the past week to enter this agreement?
sounds like the guys a dirtbag with the whole "fire the agent thing", but did he get fired? and will he not be able to afford the house?
everyone is talking about whether or not it's legal to keep the "earnest money", no one is talking about whether it's right.
i know i'm going to get angry responses to this, but, i think you should take what his withdraw cost you and move on. maybe he needs to catch a break, and you could help him out. naive, but oh well.
Hi,I can live with the cost, but just hate the fact that I told everyone that I sold the house, and planned a family vacation.
i'm really sorry this happened to you,
i hope you sell soon and for the price you wanted!
it ani't sold to you have cash in your hand,ever. best to use the term "it's under contract" then when it falls apart you can save a little face.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Okay, so your feelings are hurt. Your a builder and if you were a builder in Michigan, you'd probably have five buyers for every one that actually closes a deal. If a Michigan builder got a reputation for keeping earnest money, the television crews would be out there at the model making the builder look heartless.I stand by my first instinct: balance your real world losses with your need for retribution. Some will tell you that you need to refer to the contract and I won't dispute that but I also think you need to balance the damage to yourself and your karma if you decide to send this deal into litigation. Without knowing much, I'll be most lawyers would tell you ?'s a crapshoot. Even if your contract is tight, you still have to rely on a judges ruling. The other lawyer gets to pick away at things. Emotional energy takes a toll.The real question is this: did you turn away another real buyer or maybe you didn't even have an inquiry. Did you start some paperwork that costs you real dollars or did the buyer opt out before you incurred any additional costs that can't be recouped in the future sale to a "real" buyer. I lost the sale of my condo twice already and I know the dissapointment but I didn't once pour over the paperwork to see if I could get some money from them. I only want their money if they are going to buy my condo. Your a builder. You earn your money building. Keeping earnest money just doesn't sound the same as earning profit from the actual sale. Sometimes it's just easier to move on and keep yourself on game. Me? I'd return the entire amount, less any real costs that I incurred. I'd get that arranged in a face to face meeting and hopefully end up with a signed release and a handshake. FKA Blue (eyeddevil)
Jim, you got good business ethics, but I believe when a man gives his word he should back it. He got no excuse not to back his end.
Its not as much about ethics as it is for you to protect your karma and energy. Don't get caught up in a bitter dispute about 3k. It aint worth it. I didn't even want to bother talking about the inevitable escape clauses in the contract that I'm sure are there. Contracts are written to be broken and the only winners are the lawyers.It would be different if you had turned away some buyers or incurred costs. I'm just assuming that you didn't have any other lookers or offers because you probably would have mentioned it in the first post. Don't let the sting of embarrassment steer your ship down a path of anger and revenge. Just let it go and happily find the real buyer. We've watched two good buyers walk away in a very tight market, so I do know how it feels. We've learned to not get too excited when someone makes an offer. We have accepted and offer, gotten past an inspection, gotten mortgage approval and we still dont' believe that the place will sell. We aren't telling anyone that it's sold. If they ask, we tell them it's under contract. My reply really isn't about ethics. It's about maintaining your sanity and keeping your positive energy flowing. Legal disputes will take a very big toll, way more than 3k worth. Ethically, the guy probably has a very legit way to get out of the contract through a loan clause. You are one week into a deal, which to me is about one minute. I'd just let him go and give the uncashed check back. You ain't going to close this deal with this guy so get your sales suit on and find a real buyer. FKA Blue (eyeddevil)
1...... i've read the entire post
a little background.. i've been building and sell homes since '72
i've seen every kind of sleeze there is.. but i don't participate
here's my deal... always leave them smiling
always let them think they won.... figure out how to make lemonade out of lemons
and always move on...
look at the risk / reward ratio :
risk: litigation without end, bad publicity, a mounting time sheet devoted to one azzhole, a clouded title
reward: $3000
duh.. jim is dead on.....
set up a meeting, get a release drawn up by a real estate lawyer, give him back his money , shake his hand,wish him luck with his job , and devote your energy to selling your house to someone who wants to buy it
in short.... it all comes back to the golden rule Mike Smith Rhode Island : Design / Build / Repair / Restore
you put it better than i did!
nicely said.
My take on real estate in my home state and a couple others where I have bought or sold:
Earnst money isn't usually that strong of an indicator that it's a done deal. There are lots of legitimate ways and even more 'not so legitimate" ways for a buyer to get his deposit back. If you are using some sort of standard real estate or MLS contract there lots of ways. On the otherhand, if you had "added" to the contract " NO REFUND of earnest money for any reason whatsoever" it is probley yours. (but then the house is probley gonna stay off the market for a while, while the "buyer" screws around.
if you had a house for sale and demanded 10% deposit, I would be somewhat concerned (fair amount of interest lost). Add to that, it is non-fundable for any reason and I will probley lose interest in buying from you. sorry, but that's just the way it is in a lot of markets.
It is real easy to jump ship from a buyers agent, buyers usually have very little if any obligation to buy anything with their agent. But you may have to sign a statement that you will not buy anything that they showed youy without their earning a commission. Sellers will have a very difficult time just firing their agent. Look at your listing agreement. I bet there are a ton of penetlies if try to do an end run around them. Real estate agents look out for themselves #1. They have been screwed in the past with deals like this and their current contracts look out for them. And they will keep an eye on things around town and find out.
So all in all, I suspect you will have to return the money (i assume it was really escrowed by your agent). Try to do this as quick as possible to get the home back on the market.
PS ignore piffens snide childlike remark, looks nice
"PS ignore piffens snide childlike remark, looks nice"What remark would that be?It is obvious you misinterpreted something I said
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Since the OP didn't submit the photos for purpose of critique, I'll withhold all my thoughts on the place.
hope he gets lucky.
If I misunderstood the above, my apologies.
At the point where I said that, I ccould see a danger of the thread degfenerating from the topic of how to deal with the seller and the deposit, into digging out all the little things wrong with the house.
That happens here sometimes.Like all houses I have ever seen, this one has some darn nice features and a few things that I dislike.But what I was doing was trying to take a high road position and set an example in stating the *I* will refrain from going down that road.Looks like I worded it poorly, but that was my intent.IF
The OP had posted those photos asking for a critique, then I would have made all my thoughts known, good and bad.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Start by talking with your agent, but remember, he/she isn't an attorney
Law varies from state to state, any "legal" advice given here without caveats and hedges is worth, at most, what you have paid for it.
May your whole life become a response to the truth that you've always been loved, you are loved and you always will be loved" Rob Bell, Nooma, "Bullhorn"
"We Live" http://www.youtube.com/watch?v=7kuBgh0VCqI&mode=related&search
And Annie Ross's "Twisted" http://www.youtube.com/watch?v=8lqivrCIRGo&mode=related&search=
"any "legal" advice given here without caveats and hedges is worth, at most, what you have paid for it."is that advice legal?;)
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Nice looking house, looks very well done.
Good luck for a quick sale...buic
http://www.realestateabc.com/insights/deposit.htm
Nice link....makes sense when you think about the earnest money being in a joint trust account. Wonder if that is universally true state by state?
Better get your shyster involved right now, quick.
For sure, he's got his already. Or, he is one.
"What's an Arkansas flush?......It's a small revolver and any five cards."
Hi,
My Agent called me and said he was willing to split the money 50/50. I agreed to it as most of you had suggested to resolve it. I did learn a lot though. Thank you for all your help.
Khaled,
Of course he agree, he know he going to lose it all, so anything better than none. that the purpose of earnest money , so they dont bid multi property
you bring up binding multiple properties
our neighbors moved to Tejas. On the scouting trip they claimed you could put $100 down as earnest money. And people were taking it. So they put a couple hun down on a couple of properties. Went back and decided which to take
This was a couple years ago. Didn't think the Texas market was bad enough that folks would actually TAKE a $100 earnest money deposit
Maybe it's a fairy tale
Didn't think the Texas market was bad enough that folks would actually TAKE a $100 earnest money deposit
Go to http://www.realtor.com and look at houses in any city there. In particular look at big new homes. I've seen some McMansions on that web site there this year, Ft. Worth area for example, at prices which must be below cost. New or nearly new 4br,4bth 3500sqft on a big lot for $200K. Of course land is cheap but....??
congrats on closing things up and getting some cash reward too. I admit to being in the camp that thought EM was a token amount, non-refundable under any circumstances, therefore meant to weed out the frivolous from the serious offers. i have bought 2 houses and here in TN, I was under the $1000 - $2000. But then again, i was totally serious by the time we got to that point and I had no intention of backing out.
Glad it worked out, somewhat, for you.
"What's an Arkansas flush?......It's a small revolver and any five cards."
Keep the earnest money and let the sale go. You dropped $14,900 of of the selling price and he wanted to screw his "temporary" agent. He's a chisler and probably found a different house, for less, and he thinks you'll roll over. Look at it this way- you keep his three grand and find another buyer who's willing to pay what you're asking. You get to yell "WOO-HOO!!!" and go to Europe.
This was a sellers market...mid /late 80's...lady r/e agent is raggin me to sell (I don't really want to) ...brings me an offer and the earnest money is a note....I sez what the hell is this???? "Oh they don'thave a lot of cash and this is the same as cash...I sez gtf outta my face, person, and dont bother me any more...Worked..
Bud
I was selling in a buyers market last year and I would have gladly taken a promissary note as an earnest deposit.Everyone's different and you never know what is important to the seller till you offer.Right now, I'd take a promissary note on anything I own and one of them is in a good market here in Austin. We are three months away from getting it to market and I'd be thrilled to take a promissary note on a purchase agreement. Once that buyer got the mortgage off that note and purchase agreement, I'd have a contract job instead of a spec house. Different strokes for different folks. FKA Blue (eyeddevil)