Can a seller claim earnest money when the buyer backs out of a deal at the last minute?
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Can a seller claim earnest money when the buyer backs out of a deal at the last minute?
I had a signed contract to purchase my condo and one week before closing the buyer backed out of the deal. I am still waiting after six weeks for a decision to be made on whether I receive the earnest money being held in escrow. What are my chances and why is it taking so long?
Asked on May 13, 2009 under Real Estate Law, Washington
Answers:
B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
You should talk to the lawyer who was going to handle the closing for you, since he or she would know all the facts that go into this question. If you don't have a lawyer, you should get one now, and you can start your search for a qualified attorney at our website, http://attorneypages.com
The answer will also depend on how the facts fit into Washington law, and the law in this area is different from one state to the other. In some states, the earnest money stays tied up until you close the sale with a new buyer, and you only get the earnest money, or a portion of it, to cover the difference between the first contract price and a lower price on the actual sale; if you end up getting a higher price, you've lost nothing and so you get none of the earnest money.
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