What to do if a seller will not return your deposit?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What to do if a seller will not return your deposit?
My husband and I were denied a mortgage, three days before the closing of a home. The seller and their agent are refusing to return our earnest money. What recourse should we take in this matter. Our Realtor has been handling the situation up to this point.
Asked on June 9, 2011 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Unfortunately, you may not have any recourse in this case. IF you contract of sale had a finance contingency--that is, a clause stating that if you could not get financing, the contract would be terminated without fault and you'd get your money back--and if you complied with all the terms and conditions thereof (e.g. relating to when you'd have to notify the other party of your right to cancel), then you could enforce that contingency. However, without an actual finance contingency, if you can cannot honor your obligations under the contract, even due to the inability to get a mortgage, the seller may keep your deposit. This is why buyers put in finance contingencies; to protect themselves in case they are denied financing.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.