Colorado - why even have earnest money?

Standard Colorado residential real estate contracts have the following clause:

"10. <b><u>PROPERTY DISCLOSURE AND INSPECTION.</u></b>...
a. <b><u>Inspection Objection Deadline.</u></b> Buyer shall have the right to have inspection(s) of the physical condition of the Property and Inclusions, at Buyer's expense. If the physical condition of the property or Inclusions is unsatisfactory in Buyer's subjective discretion, Buyer shall, on or before <b>Inspection Objection Deadline</b>:

<b>(1)</b> notify Seller in writing that this contract is terminated, or

<b>(2)</B> provide Seller with a written description of any unsatisfactory physical condition which Buyer requires Seller to correct (Notice to Correct)."


Does this wording allow Buyer to terminate the contract for any whimsical reason? What if no actual inspection was performed? Is the Buyer required to specify why the contract is being terminated or just that the physical condition is unsatisfactory? If there is no legitimate objection (just that she no longer wants the property) and she can't be held to the contract, what is the purpose of collecting Earnest Money?


I rejected another offer in favor of this Buyer who is now terminating the contract, specifically, according to her realtor, because of the fact that there are neighbors on each side of the unit (duh, it's a townhouse) and because of the fact that the furnace is free-standing in the laundry room and not behind a wall or door (standard design in the complex).

There are absolutely no issues to show up on an inspection report. The property is less than two years old and is more beautiful than the model.


I am out an additional month's expenses (mortgage, insurance, association dues, etc.) while I find another buyer; her Earnest Money would cover these expenses for one month. Am I obligated to have her Earnest Monies returned to her?

[HomeGuru]

[quote]Originally posted by refurl
[b]Standard Colorado residential real estate contracts have the following clause:

"10. <b><u>PROPERTY DISCLOSURE AND INSPECTION.</u></b>...
a. <b><u>Inspection Objection Deadline.</u></b> Buyer shall have the right to have inspection(s) of the physical condition of the Property and Inclusions, at Buyer's expense. If the physical condition of the property or Inclusions is unsatisfactory in Buyer's subjective discretion, Buyer shall, on or before <b>Inspection Objection Deadline</b>:

<b>(1)</b> notify Seller in writing that this contract is terminated, or

<b>(2)</B> provide Seller with a written description of any unsatisfactory physical condition which Buyer requires Seller to correct (Notice to Correct)."


Does this wording allow Buyer to terminate the contract for any whimsical reason?
**my response: basically yes, as long as it has to do with the condition of the property.
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What if no actual inspection was performed?
**my response: then there can be an agreement that the Buyer waives the inspection and the above-mentioned contract clause.
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Is the Buyer required to specify why the contract is being terminated or just that the physical condition is unsatisfactory?
**my response: no reason need be given.
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If there is no legitimate objection (just that she no longer wants the property) and she can't be held to the contract, what is the purpose of collecting Earnest Money?
**my response: to show good faith on the part of the Buyer, to bind the contract**************.
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I rejected another offer in favor of this Buyer who is now terminating the contract, specifically, according to her realtor, because of the fact that there are neighbors on each side of the unit (duh, it's a townhouse) and because of the fact that the furnace is free-standing in the laundry room and not behind a wall or door (standard design in the complex).

There are absolutely no issues to show up on an inspection report. The property is less than two years old and is more beautiful than the model.


I am out an additional month's expenses (mortgage, insurance, association dues, etc.) while I find another buyer; her Earnest Money would cover these expenses for one month. Am I obligated to have her Earnest Monies returned to her?

my response: yes, read the terms and conditions in the contract. As much as you desire to keep the earnest money deposit, the contract allows the Buyer to walk and requires the deposit to be returned. These questions that you asked should be posed to your Realtor. If you do not have one, you could use one.