Seller backing out of a deal after receving Earnest Money?

[Greg P.]

Hello all. I'm writing this post because we recently put a property under contract with earnest money down. The seller calls me today and tells me a total BS excuse on why he is backing out of the deal. He says he hasn't deposited the Check and wants to give it back. I would be fine with this, but I have my people to pay for executing the contracts, and doing due diligence on the property. Also, I put in a lot of time and effort to make this deal possible. This is the first time this has happened and would like some advice. Thank you very much!

[Peter Giardini]

I have had this happen several times... my solution is simple.

If they don't go through with the executed contract (that fact that they accepted the check and didn't cash it doesn't mean much) tell them that they have three options...

Option 1 -- is to continue down the path and sell the property to you as agreed to in the contract,

Option 2 -- they can buy you out of the contract for a price determined by you based on your expenses and a reasonable profit for you time (my best payout in a situation like this was $5K)... or

Option 3 -- you will record the contract against the deed and cloud the title until they agree to either options 1 or 2.

Best of luck!