Earnest Check dispute

[NandCo]

What is the name of your state? MN

I made an Assignable Purchase Agreement offer with finance contigency on a home that was FSBO.

The 10k earnest check was a check from my investor that I was going to assign the PA to.

The investor/buyer backed out and their 10k check bounced in my broker's escrow account.

Well the deal fell thru and I cannot clsoe on it due to credit score drop. So I sent a cancellation of PA to the seller with earnest to be refunded to "Other" and left blank because of the bounced check. (No funds)

She signed and we went along our way.

My agents broker is now holding her commissions because the broker thinks he is goin to be sued for liquid damages by this seller.

So I had to deposit a 10k check from my account (since PA in my name) to the brokers escrow to make the bounced check good. He will then release her commissions.

I have now sent another cancellation of PA with earnest to be refunded to BUYER aka me.

My question is: What if she refuse to sign the cancellation and tries to keep my 10k?

Thanks

[lcannister]

Your post is very difficult if not impossible to unravel.

IF you (since you appear to be the purchaser) could not get financing, which if I am correct was in the PA as a contingency, then what's the big deal and why is the Agnet/Broker afraid of being sued?

If you are going to work for your INVESTORS again I suggest you get a Realestate Atty who can give you a few legal pointers!

Sorry there are no aswers there because I am not sure exactly what the question is.

Oh and what commishion if the sell never took place?

[NandCo]

Originally Posted by lcannister

Your post is very difficult if not impossible to unravel.

IF you (since you appear to be the purchaser) could not get financing, which if I am correct was in the PA as a contingency, then what's the big deal and why is the Agnet/Broker afraid of being sued?

If you are going to work for your INVESTORS again I suggest you get a Realestate Atty who can give you a few legal pointers!

Sorry there are no aswers there because I am not sure exactly what the question is.

Oh and what commishion if the sell never took place?

The broker is holding my agent friends commission on a total different deal.

Broker is afraid of being sued for liquid damages from this seller because her house didnt sell and she already moved to FL. Nobody told her to move.

My question was, does she have any grounds of holding my earnest ? I have a feeling she will refuse te cancellation and we may have to go to court for it. The broker will not realse my earnest until she agrees.

[seniorjudge]

Q: My question was, does she have any grounds of holding my earnest ?

A: What does the written contract say?

[NandCo]

Originally Posted by seniorjudge

Q: My question was, does she have any grounds of holding my earnest ?

A: What does the written contract say?

The written contract states that I was the Buyer but can assign it.

It also states that for any reason if I could not secure financing that the PA will be cancelled and earnest money to be refunded to BUYER.

The thing is, I think she is really mad because her home didnt sell. After MY deal fell thru, we signed a cancellation but didnt state where the earnest should go back to since the original check bounced. Since then, she took on another offer totally seperate from me after signing OUR cancellation and she proceeded to move forward.

BUT that other deal fell thru and now she is mad at the world mainly going back to me.

Since after all this happen, I was told that I needed to put in my own check to cover the earnest that bounced... That is what I am trying to get back as I cannot lose that 10k...

Thank You for any insight...

[lcannister]

Looks like you are headed to court unless someone wants to take the time and settle this matter before that happens and 1/2 gets eaten in Atty fees as that amt is over the small claims arena.

You have a contract, that contract has a financing contingency right? So what is the hold up here?

Why does the seller have to sign another release? What does the agent's commision on this deal have to do with another deal? Way to many questions as well as a possible fraud concern.

[NandCo]

Originally Posted by lcannister

Looks like you are headed to court unless someone wants to take the time and settle this matter before that happens and 1/2 gets eaten in Atty fees as that amt is over the small claims arena.

You have a contract, that contract has a financing contingency right? So what is the hold up here?

Why does the seller have to sign another release? What does the agent's commision on this deal have to do with another deal? Way to many questions as well as a possible fraud concern.

Yes I DID have a financing contingency...My scores dropped below the minimum required to get approved for the loan.

The seller signed a cancellation that stated earnest to be returned to OTHER, because the original earnest check from my Investor that I was assigning to bounced.

The agent's commission comes into play because her broker said that he was going to hold her commissions from another deal until we can deposit our OWN 10k earnest into his escrow. The he would release the commissions. He was in fear of being sued by the FSBO seller.

Now I am asking her to sign another cancellation and return earnest to buyer since now there is money in the escrow account. Seller knew the original earnest check bounced and she signed the original cancellation and went on accepting a different PA from a different buyer.

How does this constitute fraud?

[lcannister]

Financing contingency, case closed (barring other contingency to negate this one)tell them to release your 10K or you go to court.

I did not say there WAS fraud but there seem to be many details that we do not know in order to rationally answer your questions.

IF, and I repeat myself, you are going to be involved with other INVESTORS get yourself an Atty BEFORE this method of making some money off the deals ends up be a loser for you. If one can not afford to lose 10K then one does not get involved with a risky business.

[NandCo]

Originally Posted by lcannister

Financing contingency, case closed (barring other contingency to negate this one)tell them to release your 10K or you go to court.

I did not say there WAS fraud but there seem to be many details that we do not know in order to rationally answer your questions.

IF, and I repeat myself, you are going to be involved with other INVESTORS get yourself an Atty BEFORE this method of making some money off the deals ends up be a loser for you. If one can not afford to lose 10K then one does not get involved with a risky business.

Thank you for your insight.

Update, I am meeting with broker today and we will provide evidence of letter of credit denial along with a copy of current credit report to show scores drop.

My concen is, does she have any grounds to refuse to sign the cancellation? Even though she agrees to the financing contigency?

Could she drag this out and make it go court? She seems like the type that would.