Real Estate Investor · Roseville, CA · Member since 2013 · 3 posts · 0 votes
So I am selling an investment property in Sacramento and after about 3 weeks, the buyer fell though. We had another back up offer so we decided to send the original buyer a cancellation stating we are going to keep their deposit because they wrote the offer as an all cash offer but did not state it was contingent on a sale of their own home. Upon sending the cancellation, the agent threatened to hold it up in court and then title said we can not move on with the sale to the new buyer until the matter is resolved.
My question is, how frequent is it that seller keep deposits without having to fight for it? What is the process say we did decide to fight to keep it or should I just give the money back and move on with the sale to the new buyer?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
What exactly do you mean that you sent a cancellation? Was the contract still in force? If the buyer missed the closing date without fulfilling the contract or extending it, you shouldn't have to send a cancellation. The fact that you sent a cancellation says to me that you were trying to cancel the contract before the buyer defaulted. Is that true?
Perhaps you can be more specific about timeframes and whether the buyer actually defaulted or not?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
It's state dependant. Here, if it is JUST a dpeosit dispute, and no one trying to force a sale, then the deposit dispute does Not create any title/closing issues. This is often misunderstood, and you need a RE attorney to decipher.
Life may be easier returning the deposit and moving on.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
What exactly do you mean that you sent a cancellation? Was the contract still in force? If the buyer missed the closing date without fulfilling the contract or extending it, you shouldn't have to send a cancellation. The fact that you sent a cancellation says to me that you were trying to cancel the contract before the buyer defaulted. Is that true?
Perhaps you can be more specific about timeframes and whether the buyer actually defaulted or not?
Real Estate Investor · Roseville, CA · Member since 2013 · 3 posts · 0 votes
13y
J Scott It was to close within 10 days but we were way beyond that point. My agent is telling me that we can keep the deposit but it might take a while since title has it and the buyer is threatening to take it to court. And with the new buyer wanting to purchase the home, it might be our best interest to just move forward and give them the money back.
So if they breech contract, I dont have to cancel the original contract? Not sure how it works. Do I just contact title and have them deposit it to my account?
If a transaction in the future does fall through and it is the buyers fault, what is the process of getting the earnest money deposit?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Generally, you have to notify the party they are in default, After they are in default. The title co. won't simply give you, or the other party, the money. If both parties don't sign a mutual release, someone like a judge or an arbitrator will have to instruct them in a legal manner.
Investor · Sacramento, CA · Member since 2011 · 11 posts · 0 votes
13y
In Sacramento (California, really) it is very difficult for the seller to keep the deposit, regardless of what the buyer does. Title will not release the deposit to the seller with out the buyer agreeing and only if the buyer agrees.
It's probably not worth it, unless it's a large deposit. If they did not perform you may win, but if it's not too much money may not be worth it.