In a real estate transaction, when a buyer backs out of a deal do they get back all of their escrow money or does the seller get part or all of it?
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In a real estate transaction, when a buyer backs out of a deal do they get back all of their escrow money or does the seller get part or all of it?
Asked on January 11, 2013 under Real Estate Law, Nevada
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
The seller is generally entitled to keep all the escrowed monies as damages for the buyer's breach of the agreement to buy the property, except--
1) If the buyer properly terminated the transaction according to some contingency or provision in the contract of sale which allowed him/her to do so without penalty; for example, the sale was properly terminated pursuant to a finance contingency.
2) If the reason the sale was terminated was fraud (a material, knowing lie or misrepresentation) or material breach of contract by the seller.
Apart from the above, the seller typically keeps the escrow.
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