If a contract for sale of residential property does not close due to buyer not getting financing by certain date to close, can seller keep escrow deposit?

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If a contract for sale of residential property does not close due to buyer not getting financing by certain date to close, can seller keep escrow deposit?

I had a signed contract 01/29 to sell my property and close by 03/11. The buyer’s realtor asked for 2 extensions of time to

Asked on April 1, 2019 under Real Estate Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Legally, if the buyer does not or cannot close, you are entitled to the deposit as "damages" for the buyer's breach of contract; typically, the buyer only gets the deposit/escrow back when the seller does not or cannot go through with the sale.
Practically, if they will not voluntarily agree to cancel the contract while letting you retain the deposit, you'd have to bring a legal action (lawsuit) for a court order that the contract be cancelled and the escrow released to you: only a court can order what a person does not do voluntarily. You have to decide if the cost and time of a lawsuit is worth the $1,000.


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