What can I do if a buyer refuses to turn over the earnest money?

UPDATED: Oct 1, 2022

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What can I do if a buyer refuses to turn over the earnest money?

Our house has been up for sale for over 3 months. We had a buyer that put a contract on in about 1 and half months ago. Closing was set and a week before closing date we were told that the buyer had a lien that had to be taken care of before closing so it was delayed and a date set. About a week before this closing we were told that they could not pay their lien and there would be no closing. Our house was off the market for over 1 and a half months and we have $10,000 we have put

down on a house we are having built that will be ready in a month. We put all of our things in storage because the buyer wanted the house within a few days of closing so we spent a lot of money getting things stored because of the first date of closing and now we are sitting in an empty house, paying storage fees, we will probably

loose the $10,000 we put down on our new house because they can’t pay their liens. We hoped to at least get the earnest money to help with some of our expenses. Can we hold the realtor responsible for any of this? How did she not know there was an issue. These people were actually renting a property from her that she sold and had to get them out. She should have known something about them, right?

Asked on November 17, 2018 under Real Estate Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, you can't hold the realtor responsible: the realtor has no legal duty to make sure that the buyer was in a financial position to sell and/or willing to sell, and so is not liable for the consequences of the buyer not closing--when there is no legal duty, there is no liability. The realtor is not the legal guardian or or employer of her buyers; they are separate persons over whom she has no responsibilities or authority.
You can sue the buyer seeking a court order that the earnest money be released; a court has the power to order the release of the earnest meony and should do so when the buyers refused to close.
In addition, unless the terms of the contract clearly limit your recover in the event of the buyer's breach to the earnest money, if your provable losses or costs exceeded the earnest money, you may be able to sue for the additional amount(s)--so if you have lost, say $15,000 in all your costs due to the breach, and the earnest money was $5,000, you may be able to sue for the other $10,000, too.

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.

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