Earnest Money

[Thaskins]

I am a first-time homebuyer in the state of Maryland. I made an offer on a foreclosed property, which was accepted by the bank. In my offer, I had a 10 days home inspection contingency. The bank countered with a 7-day. When my Realtor sent me the bank addendum, she mentioned the bank changed the home inspection to 7, not 10 days. Well, being a first-timer, I thought we had 7 business days, not 7 calendar days. The contract was ratified on a Wednesday; we had the inspection the next Tuesday. I decided withdraw my contract due to a structural issue the home inspection found. Long story short, we missed the 7 day inspection contingency. The bank let me out of the contract, BUT does not want to give me my $3000 earnest money deposit. She is now trying to get my money from the bank, based on a financial contingency. She had my lender draft a letter stating that because of the structural damage, the bank would not finance my loan. Is there any way I can hold my Realtor responsible? Do I have a claim, and if the selling bank does not want to return my deposit, can I get it from my Realtor's broker, due to lack of reasonable care?

[justalayman]

apparently the contract did not clarify whether is was calender or business days, correct?

what day did you give notice of termination?

did the contract say "7 days" or did it specify a date?

did you have a financing contingency in the contract? If so, what were the terms of that contingency?

[Thaskins]

I looked at the contract; it did state "calendar" days. The 15 days financing contingency is in the contract. I withdrew 7 days within the financing contingency. Due to two major deficiencies, I did not have the appraisal and I withdrew the contract. I am seeking an FHA loan and getting money from the county’s stabilization program, both of which require to seeing the inspection report. Not to mention, the contract states the property is “As-is” sale and capped the lender required repairs at $500. The major defects would cost well over $500. Now, the seller is willing to give me ½ of my deposit. Can I get my full deposit from the seller; can I get it from my Realtor; or do I take the ½ and take this as a lesson learned AND find a new Realtor?

[justalayman]

Now you are tossing in a financing contingency plus a different time constraint. You claimed to be withdrawing based on the inspection in the first post, now you claim it is on the financing contingency.

To be able to depend on a financing contingency to be activated, you must have attempted to obtain financing, as specified, and been rejected. Simply stating you are withdrawing based on that without support is not a valid justification without support.

So, was your financing formally rejected so as to be able to depend on that contingency?

Also, you state you withdrew your offer 7 days in. Does that mean you withdrew the Wednesday following acceptance? If so, and if the rejection was allowed per the inspection contingency, then you should be due the entire deposit.

Now, understand; if I write (exactly);

offer is contingent upon (whatever) inspection;

that offers me no protection if the inspection comes back in a negative opinion. It just stated I had to be allowed an inspection. Once the inspection is performed, the contingency is fulfilled. The contingency would have to include something such as:

offer contingent upon obtaining inspection report and acceptable findings by (whomever needs to approve the inspection, which would be you, FHA, whoever). Should findings not be acceptable to the previously noted entities, buyer reserves the right to withdraw offer of purchase and is to be refunded any deposit held by seller in full.

the exact terms of the contingency and your actions concerning them is critical to your ability to claim your deposit. Depending on how much you are speaking of, you might want to sit down with an attorney to read over the documents and provide an opinion. Then, you would have a much better idea as to being able to make a claim to your deposit or not and how to obtain it.