when is the seller entitled to earnest money?
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when is the seller entitled to earnest money?
We started the process of purchasing a
house about a half hour away from our
house. However prior to the home
inspection being completed and prior to
us putting forth the earnest money we
decided it was not a good fit for us
because of the location and the
neighborhood. So we signed a release
of contract. The seller is refusing to
sign unless we pay them the earnest
money. Are we required to give them
the earnest money even though we
aren’t purchasing the home anymore?
We are a young family and every dollar
counts right now. Please help.
Asked on August 30, 2017 under Real Estate Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Yes, you have to give up the earnest money. The seller may keep the earnest money or deposit if the buyer pulls out of the deal or cannot go through with it for any reason not the seller's fault (i.e. not due to the seller's own fraud or breach of contract). You deciding the home was not a good fit, or you needing the money, is not the seller's fault; therefore, if you pull out the deal for this reason, the seller may keep the earnest money.
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