Frustrated!

[statefan]

What is the name of your state? Tennessee
My sister and I are selling an inherited property in North Carolina. We accepted an offer from a first time buyer, agreeing to pay closing costs and supplying a home warranty at their request. There were no contengencies in place and finacning was already in place. After the home inspection, there were several issues which needed to be addressed. We hired and paid an electrician to repair the electrical problems. A contractor was arranged to repair the structural issues, but work was not started and was not to be started until after closing, since money for the repairs were to be held in escrow so we would not have to pay for these out of pocket. The buyer was aware of this and also knew the repairs would not affect their move in after closing. Needless to say, forty minutes before closing, the buyer backs out of the sale. Now she refuses to return the earnest money, stating the interest rate was too high (7%) and the repairs were no done (it wasn't in the contract for us to repair them anyway). Our estate attorney said we could sue for specific performance, but that would probably get us nowhere. I do plan a small claims case, but was curious to see if I should contact her first by certified mail, asking for her to release the money before I just sued? Also, I had to travel 7 hours to NC for the closing that never hapened. Can I sue for those expenses as well?
Thank you in advance for your help and advice!!!!!!!!!!!

 

[JETX]

I do plan a small claims case, but was curious to see if I should contact her first by certified mail, asking for her to release the money before I just sued?

You don't have to do that... but it would be reasonable to do so.

Also, I had to travel 7 hours to NC for the closing that never hapened. Can I sue for those expenses as well?

You can sue for anything you want.... the court will decide whether your request is reasonable and/or allowed by law.

 

[virs]

Now she refuses to return the earnest money.

What do you mean by "she" refuses to return? The earnest money is kept in an escrow account (either with the broker or a escrow agent - attorney). If the buyer has used the NC Association of Realtor's "offer to purchase and contract" agreement (standard form 2-T), see bullet 4 for about the handling of the earnest money in the event of a dispute between seller and buyer over the return or forfeiture of earnest money held in escrow. In short both seller and buyer has to consent to its disposition or disbursement is ordered by court.

 

[HomeGuru]

one party refuses to consent to the deposit release.

 

[statefan]

new offer

So we have a new offer on the house, there are some structural repairs that I mentioned in my original post which need to be made.

My agent says the repairs HAVE to be made, that a bank will not lend money to a lender to purchase a house with structural damage (water damaged floor in bathroom and floor joist cracked). My husband thinks he is getting a kickback from the contractor, but we have always been prepared to fix these things. But after reading some posts on this website, I have a question.

Question: Does this have to be repaired by the seller, or can the repair cost be deducted from the sale price of the house if buyer agrees?

Thanks in advance!

 

[Gadfly]

In response to the new offer, it is true that many lenders require repairs to be made prior to closing. You can contact the lender directly if you don't believe your agent.

On the original deal you previous buyers claim that "7% is too much" is just plain BS. Follow the State's procedure for dispute resolution.

 

[statefan]

Thanks so much for your reply! I was curious to get an outside opinion, my husband tends to be skeptical of everyone!

As far as the original offer on the other house, I agree the "7%" excuse is total BS! I have mailed her a certified letter urging her to release the earnest money to avoid a small claims suit, but it was returned to me. So now she can expect a summons to an appointment in front of a judge! I cannot wait!

Thanks again!

 

[acmb05]

Thanks so much for your reply! I was curious to get an outside opinion, my husband tends to be skeptical of everyone!

As far as the original offer on the other house, I agree the "7%" excuse is total BS! I have mailed her a certified letter urging her to release the earnest money to avoid a small claims suit, but it was returned to me. So now she can expect a summons to an appointment in front of a judge! I cannot wait!

Thanks again!

Why does the buyer have the earnest money? The buyer gives the seller earnest money when the offer is made not the other way around.

 

[statefan]

The buyer doesn't have the earnest money, it is being held in escrow. Both the buyer and seller have to agree to release the money either way, and of course my sister and I released the buyer from the contract, but refused to release the earnest money back to the buyer since she had 1) no valid reason to terminate the contract, and 2)waited until 40 minutes before our closing to back out.

I'm assuming she feels like she did nothing wrong and is entitled to her money back, so she is refusing to release the money to us. So, there are three options, we can sue her, she can sue us, or we can let the money sit there for three years and let the state decide what to do with it.

I would rather take a proactive role and sue her first, instead of waiting.

 

[HomeGuru]

The buyer doesn't have the earnest money, it is being held in escrow. Both the buyer and seller have to agree to release the money either way, and of course my sister and I released the buyer from the contract, but refused to release the earnest money back to the buyer since she had 1) no valid reason to terminate the contract, and 2)waited until 40 minutes before our closing to back out.

I'm assuming she feels like she did nothing wrong and is entitled to her money back, so she is refusing to release the money to us. So, there are three options, we can sue her, she can sue us, or we can let the money sit there for three years and let the state decide what to do with it.

I would rather take a proactive role and sue her first, instead of waiting.

**A: then go see an attorney.