my buyer was denied a mortgage over a month after signing paperwork. Am i entitled to any of her deposit?

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my buyer was denied a mortgage over a month after signing paperwork. Am i entitled to any of her deposit?

the agreement for sale was signed in mid April and we didn’t find out until end
of May that she was denied. I was already making my plans to move, the house was
off the market all that time and i feel i deserve some compensation.
She offered the 10,000 deposit. I didn’t require it.

Asked on June 1, 2017 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If the contract of sale provided that you, as the seller, could keep the entire deposit in the event the buyer breached the agreement, such as by being unable to close, you can keep the whole thing. If the agreement doesn't provide that, you will be able to retain an amount equal to the adiditonal costs or losses that the breach provably causes you: e.g. if your "carrying cost" for the home is $1,500 per month and it takes you an extra 5 months to sell it after this, you would be entiled to 5 x $1,500, or $7,500 of the deposit. The deposit would be retained in escrow until the damages or losses are determined (e.g. until you sell; or until enough months of non-sale, despite your reasonable efforts, have gone by that it is clear that you are entitled to the whole deposit for your loss).


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