buyer wants deposit on offer returned

[dobro1]

Buyer gave $500 deposit when signing offer to buy my townhouse. On the day we were set to sign the P&S, buyer gets cold feet and backs out (i believe buyer found another house to buy). Buyer had inspection and i agreed to have fixed the items that they requested. The offer does not allow them to get out of contract for any other contingency (except mortgage). The listing agent wants to return the check to the buyer. He did not (yet) put this in escrow, and he feels they will take it to small claims and hold up the selling of my house. The lister is concerned that this buyer and myself have not both signed a statement that our deal is null & void, and this could lead to problems. Of course, the seller has verbally ended the deal. Questions: 1) Most important-Can the seller hold up the selling of my house? 2) If they have put a stop on the check, what are my chances of getting the money from them in small claims? I believe i have a great chance of winning, but can they still not pay me if i win...
3) is the listing agent at fault for not putting the $500 immediately in escrow if they now have a stop on it? [State:Massach.] all advice welcome. thanks.

 

[dobro1]

revise question 1 (above): can the buyer hold up the sale of my house, if i do not return the check, and they decide to take me to small claims (as their lawyer threatened)?

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by dobro1:
revise question 1 (above): can the buyer hold up the sale of my house, if i do not return the check, and they decide to take me to small claims (as their lawyer threatened)?<HR></BLOCKQUOTE>

Here are the answers to all 3 of your questions:

My advise is to return the check (it is too small to even worry about) and have both Seller and Buyer sign an acknowledgement that the contract is terminated and therefore null and void. By dragging this issue, you face a problem since your home will not be "free and clear" to sell due to this conflict of a potential lawsuit.

The agent is guilty for not putting the check in escrow. The proper thing to do was to open escrow so that the check would be cashed and credited to the transaction. The real estate agent is not allowed to carry around a Buyer's earnest money check as if it were their own money. That is a big no no. You also lost leverage since there is no third party involved (escrow) to hold the funds until the dispute is resolved. If you really want the $500, have your agent pay this amount to you for screwing up.