Earnest money dispute

[MRM112]

What is the name of your state? Tennessee

In December, my husband and I received and offer to buy our home. The buyers wanted us to pay closing (approx. $2500). The contract offered contengencies that the buyers receiving 100% loan approval and regarding home inspection, they chose to purchase the home "as is" -- no home inspection.
Also, contengient on termite inspection.
They entered $500 to a broker as earnest money.

We counter-offered and they accepted.

The contract was signed by both parties and the changes were initialled.

We had a termite inspection and the buyers set up an appointment for an appraisal.

One week later( the day of the appraisal) .... the buyers decided that they did not want to buy the house. The appraisal was cancelled.

No good reason was ever given. Their agent gave numerous different excuses.

Their agent then submitted a request for a release of the earnest money (all of it) back to the buyer's. We did not agree to that.

We didn't break the contract.

Am I wrong to assume that we are entitled to that money?

We have a letter approving them for the loan.
They didn't want a home inspection.
We have a satisfactory termite letter.

It is not enough to sue over, though the broker has entered the earnest money into an "interpleader". We are going to general sessions court b/c they feel like they are supposed to get it back.

Our agent is frustrated. We have found out recently that the buyers do not speak English as their first language...though they are residents of the US.
Can they use that excuse to back out of a contract?

Just wanted to get some input. What do you think?


Thanks,
Mandy

 

[Souix]

What is the name of your state? Tennessee

In December, my husband and I received and offer to buy our home. The buyers wanted us to pay closing (approx. $2500). The contract offered contengencies that the buyers receiving 100% loan approval and regarding home inspection, they chose to purchase the home "as is" -- no home inspection.
Also, contengient on termite inspection.
They entered $500 to a broker as earnest money.

We counter-offered and they accepted.

The contract was signed by both parties and the changes were initialled.

We had a termite inspection and the buyers set up an appointment for an appraisal.

One week later( the day of the appraisal) .... the buyers decided that they did not want to buy the house. The appraisal was cancelled.

No good reason was ever given. Their agent gave numerous different excuses.

Their agent then submitted a request for a release of the earnest money (all of it) back to the buyer's. We did not agree to that.

We didn't break the contract.

Am I wrong to assume that we are entitled to that money?

We have a letter approving them for the loan.
They didn't want a home inspection.
We have a satisfactory termite letter.

It is not enough to sue over, though the broker has entered the earnest money into an "interpleader". We are going to general sessions court b/c they feel like they are supposed to get it back.

Our agent is frustrated. We have found out recently that the buyers do not speak English as their first language...though they are residents of the US.
Can they use that excuse to back out of a contract?

Just wanted to get some input. What do you think?


Thanks,
Mandy

***Release their $500 back to them and move on. Put your house back on the market. Its not worth it to fight over such a small amount****

 

[HomeGuru]

I agree, even if in the contract you would be entitled to keep the deposit due to default. But before you authorize release of the funds, have them sign a mutual release and indemnification agreement.

 

[nextwife]

I agree- release the transaction and forget about this buyer. You were off the market for how long before you knew they were "out" - a week?

For all you know, they may have met with a loan officer and discovered they do not qualify- maybe because some income is not "verifiable". Over the years, I've learned that sometimes people who came here from places that have "cash economies" do not have records for many of their financial transactions if they are used to dealing in cash. 100% loans are not easy to get for non-vets. LIkely, they may never have been able to close, you you may as well move on to a better transaction.

 

[HomeGuru]

With a better Buyer.

 

[MRM112]

Thanks everybody.

I guess the bottom line is the principle of the matter.
We tried very hard to please the buyers. They even wanted the washer and dryer after the initial offer had been accepted. We agreed to it. We have all been first time home buyers with little cash to go into buying a home and getting settled. We were even paying closing. Looks like we were too nice and they took advantage of it.

The funny part is that we tried to negotiate for half of the money and couldn't ever get them to respond to their own agent. They won't return his calls.

Though general sessions court isn't how we wanted to settle this..it looks as though it was the only way to get them to finally deal with this.

This is the first home we have ever had for sale. We have learned a lot. The next contract- we will approach a little more educated and wary.

Thanks again for the feedback. - Mandy

 

[Souix]

Thanks everybody.

I guess the bottom line is the principle of the matter.
We tried very hard to please the buyers. They even wanted the washer and dryer after the initial offer had been accepted. We agreed to it. We have all been first time home buyers with little cash to go into buying a home and getting settled. We were even paying closing. Looks like we were too nice and they took advantage of it.

The funny part is that we tried to negotiate for half of the money and couldn't ever get them to respond to their own agent. They won't return his calls.

Though general sessions court isn't how we wanted to settle this..it looks as though it was the only way to get them to finally deal with this.

This is the first home we have ever had for sale. We have learned a lot. The next contract- we will approach a little more educated and wary.

Thanks again for the feedback. - Mandy

***As diligent as you try to be, there will always be somebody who gets cold feet. You might try making the earnest money deposit non refundable next time around***

 

[HomeGuru]

And increase the earnest money to $1000 or more.

 

[Souix]

And increase the earnest money to $1000 or more.

***Agreed! ***

 

[HomeGuru]

Why thanks darling.