Seller Is Not Signing Release of Earnest Money.

[Mohammed Nasser]

Hi all, 

I am located in California and found my first out-of-state investment property in Dallas, Tx. I went into escrow on a condo and for the final walk through, which was one day before closing, I decided to fly out and do the walk through in person. Upon that walk through I saw that the complex that the condo is in is unsafe and very badly taken care of (compared to pictures posted online) and later learned that there are 8 individuals on the sexual offenders list living in the same complex. Overall, because of these factors, I decided I would not be able to rent out the property to my target tenant pool and decided to back out of the deal (again, this is one day before closing). I signed the release of the earnest money and sent it to the title company so they can release the funds to the seller, however the seller still has not signed the release of the earnest money (its been 48 hours) and so my 20% down payment is still with the title company. I believe the seller may be trying to delay/avoid signing the release to force me to go through on the note. I wanted to ask the BP community on their opinion on what to do and possible options in this case? This is not how I imagined my first REI deal to go.

Thanks so much to the BP community!

[Ryan Kelly]

Read paragraph 15 in your contract. You are in default. The seller has the right to force you to purchase the condo as a remedy. They don’t have to accept your earnest money as a penalty. Be careful with advice in the forums from people outside of Texas as they may not be familiar with the Texas contract or legal ramifications. Again, speak to an attorney.