If a seller releases a buyer from a contract to purchase, does the seller get to keep the buyer’s earnest money?
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If a seller releases a buyer from a contract to purchase, does the seller get to keep the buyer’s earnest money?
I have a contract to buy a house, to close within 60 days. New Link Destination
day is day 46. The
seller has been anxious from about day 14 and has been ‘bugging’ me to close.
Now she says she doesn’t want to sell to me and wants to sign a release and
keep my earnest money. My response is that I have 14 more days to go. I have to
sell my house first. I have a contract to sell but it will take more than 14 days. My
house should close 9 days after the 60 day period. I could conceivably give her
a release but not at the cost of my earnest money Not a fun situation.
Asked on May 8, 2019 under Real Estate Law, Georgia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
You have the right to buy as per the terms of the contract, though if you can't close in time, you will be in breach of contract and she may be able to then cancel the contract and keep the deposit. (If the delay is only nine days, that may be short enough so that the breach is not considered "material" or important enough as to actually cancel the contract, though she'd still be entitled to any costs or losses the delay caused her--but be aware that you will be in breach of contract and so would be in a precarious legal position.) But you do have until the closing date to be able to comply and close. If she wants to cancel the sale before that--that is, before you breach--you and she would have to agree mutually to the terms of the cancellation and release. She can ask to keep the deposit; you can refuse and proceed with the sale under the contract (and hopefully close on time). You and she would have to work something out to which you both agree to cancel the contract early. If you are in financial distress or pressure due to your own buyer pulling out, perhaps you want to offer to let her keep some small or nominal amount for her trouble and get out a sale that you may not be in a position to go through with.
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