Can I get my earnest money back 5 days after entering into a contract?
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Can I get my earnest money back 5 days after entering into a contract?
We recently decided to purchase a home. We agreed to the contract and gave our earnest money. We felt we were being pressured by our real estate agent. Anyway, on the 5th day we decided the house was too small. We were also not comfortable purchasing from an agent owned home because it was overpriced. We signed the proper paperwork a little over a week ago to cancel the contract and get our
money back. We have not gotten a response and the house is back on the market to sell. Our agent is angry at us and is not quick to help in this situation. He stated that he gave the cancellation to the seller and we just have to wait for their reply. Is there anything that we can do to get our money back? We did not have an inspection. There were many upgrades done but the home is small and most of the homes in the area are going for much less.
Asked on August 6, 2018 under Real Estate Law, South Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Based on what you write, you are, unfortunately, not entitled to your earnest money back. You entered into a contract: you are bound to that contract, even if you decide you are not comfortable with the transaction, believe you were "pressured" into it (unless that "pressure" entailed threats of violence or extortion), or that the home is too small for you, unless 1) the seller committed fraud, or lied about something material (important) to get you to sign the contract; or 2) the seller breached (violated) the contract in some material (important) way. Barring such wrongdoing on the seller's part, you could only get out IF there some provision in the contract allowing you to terminate it and get your earnest money back and you completely and fully comply with such provision. Without seller wrongdoing or some early termination clause or contingency, you are lockecd into the contract and if you refuse to go through with it, the seller may keep your earnest money or deposit as "damages" or compensation.
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