Return of deposit money after waiting 3 months, then deal falls through?

[the kabuki]

What is the name of your state? Michigan

I received 2 full price offers on home for sale. First buyer could not offer a deposit, second buyer could, so I accepted the second buyer.

She requested that the closing be done in approx 45 days (in the contract it states within 30 days) as she wanted to close on her home first. Not a problem. FYI-there was NO CONTINGENCY in our purchase agreement regarding her selling and/or closing on her home, she just requested we close in 45 days rather than 30, which date was entered on the contract.

Day before closing, she contacts me to explain that there have been some problems with her closing scheduled for the next morning before ours, and could I hold off the closing until next week until it's straightned out? Sure, I can wait a few days.

Well, this ends up dragging on for an extra month, at the end of which she tells me that her deal is dead, and that she will be unable to purchase the home. And that she would like her deposit of $5000 returned.

On the P.A. the only way stated for return of deposit money is if buyer is unable to obtain financing, but of course she did have financing.

Contract states"If a firm commitment for mortgage cannot be obtained within 20 calendar days for date of seller's acceptance, at Seller's option(upon written notice) this aggreement can be declared null and void, and deposit shall be returned. If Purchaser is rejected for the mortgage, PUrchaser shall furnish the Seller with the lenders written verification fo mortgage denial. Upon Sellers' receipt of such denial, this agreement shall become null and void and the deposit shall be returned to Purchaser" She did acquire financing within 20 days of signing and did not furnish any mortgage denials in writing, so wouldn't default apply right there?


During the course of the three months of waiting to close, I paid for all utilities, lawn maintenance, sprinkler winterization, water bill ($600! for watering new sod), association dues, interest on property loans, property taxes ($4000 which I did not expect to have to pay as the home should've been closed on already). Additionally she ordered extra cabinets in the amount of $800, which I put onto my account in order to get her a better price.

On top of all that , I lost the original 1st buyer when I signed with her.

Am I within my rights to keep her deposit money?

[seniorjudge]

Originally Posted by the kabuki

What is the name of your state? Michigan

I received 2 full price offers on home for sale. First buyer could not offer a deposit, second buyer could, so I accepted the second buyer.

She requested that the closing be done in approx 45 days (in the contract it states within 30 days) as she wanted to close on her home first. Not a problem. FYI-there was NO CONTINGENCY in our purchase agreement regarding her selling and/or closing on her home, she just requested we close in 45 days rather than 30, which date was entered on the contract.

Day before closing, she contacts me to explain that there have been some problems with her closing scheduled for the next morning before ours, and could I hold off the closing until next week until it's straightned out? Sure, I can wait a few days.

Well, this ends up dragging on for an extra month, at the end of which she tells me that her deal is dead, and that she will be unable to purchase the home. And that she would like her deposit of $5000 returned.

On the P.A. the only way stated for return of deposit money is if buyer is unable to obtain financing, but of course she did have financing.

Contract states"If a firm commitment for mortgage cannot be obtained within 20 calendar days for date of seller's acceptance, at Seller's option(upon written notice) this aggreement can be declared null and void, and deposit shall be returned. If Purchaser is rejected for the mortgage, PUrchaser shall furnish the Seller with the lenders written verification fo mortgage denial. Upon Sellers' receipt of such denial, this agreement shall become null and void and the deposit shall be returned to Purchaser" She did acquire financing within 20 days of signing and did not furnish any mortgage denials in writing, so wouldn't default apply right there?


During the course of the three months of waiting to close, I paid for all utilities, lawn maintenance, sprinkler winterization, water bill ($600! for watering new sod), association dues, interest on property loans, property taxes ($4000 which I did not expect to have to pay as the home should've been closed on already). Additionally she ordered extra cabinets in the amount of $800, which I put onto my account in order to get her a better price.

On top of all that , I lost the original 1st buyer when I signed with her.

Am I within my rights to keep her deposit money?

Q: Am I within my rights to keep her deposit money?

A: Yes.


BTW, you are way too patient.

[JETX]

Originally Posted by the kabuki

Am I within my rights to keep her deposit money?

Depends. How do you KNOW that she had a "firm committment" for financing?? Do you have anything in writing stating that??
If so, then yes, you would likely have a valid claim to deny her request.
However, if you don't have ANYTHING in writing, you can bet she will claim that she never met the contingency.... and the deposit should be refunded.

And I know... the agreement puts the responsibility on the buyer to provide the denial letter... but it is fairly common to be lax on these issues.... creating a potential dispute that keeps us in business!!

[HomeGuru]

Whomever wrote the contingency needs a lesson in contract law. That is unless they represent the Buyer.

[the kabuki]

Originally Posted by JETX

Depends. How do you KNOW that she had a "firm committment" for financing?? Do you have anything in writing stating that??
If so, then yes, you would likely have a valid claim to deny her request.
However, if you don't have ANYTHING in writing, you can bet she will claim that she never met the contingency.... and the deposit should be refunded.

And I know... the agreement puts the responsibility on the buyer to provide the denial letter... but it is fairly common to be lax on these issues.... creating a potential dispute that keeps us in business!!

Well, since we were set to close the next morning, she had financing. Do I have a "commitment" for financing in writing? No, just her lender information, amount of her mortgage, etc on the closing papers.

I may see where you're going with this though. My thought was that since she didn't end up closing her home she will no longer have the downpayment, which in turn means that she may no longer be able obtain a mortgage. Hence a denial for a mortgage and a return of deposit. But I have not received any denial letter (as of yet) and wouldn't there be some sort of time limit on this? Does the fact that we did not have a contigency based on the sale of her home come into play here? And even if I did have the commitment for financing letter, couldn't a buyer still back out, say they lost their job sometime before the closing but after the commitment letter, and no longer had income? I see a need in the contract for a specified time limit on the buyer providing either an acceptance or denial from the lender. We had a time limit on obtaining a mortgage, but nothing on a denial letter. Well, live and learn I guess. Hopefully if this does go to court a judge will take into account the costs I've had with this.

Whomever wrote the contingency needs a lesson in contract law

Have to agree with you there