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Welcome and thank you for your question. Can you tell me who sent the letter? You stated "they"
Thank you for the clarification.
Give me a few moments to pull up 876 IAC 8-2-2.
The seller would only entitled to earnest if the purchaser was in default under contract. You stated the appraisal came back showing that in fact this was a 2 bedroom and not a 3 bedroom home. When did you become aware of the appraisal? Did the lender deny financing based on the appraisal?
Where I am having an issue with is what notice did your agent provide to the seller requesting the mutual release of the contract?
I don' t see where you have defaulted. You would not be required to continue with the transaction if the property is not what is stated in the contract. Can you attach your contract and the letter?
The release is not setting out the legal position for terminating the contract. Personally I am very disturbed by the situation and cannot imagine the theory the seller is using to suggest they are entitled to keep your earnest money when they misrepresented the bedrooms. The language they are citing ( 876 IAC 8-2-2) allows the seller to retain the earnest money in the event of default on your part I see nothing to indicate that you defaulted.
Let me make sure that I am clear on the facts. Thank you for your patience in answering my questions as I want to make sure that you will get your earnest money refunded. You stated that The selling agent..it is his home..well his soon to be ex wife's home. It is listed in her name. The listing agent is the person that represents the seller. The Selling agent represents the buyer. I believe that you are telling me that the listing agent's wife is on the title to the property. Is that correct?
This adds another level as the listing. agent needed to disclose the true nature of the number bedrooms and I see an ethical issue for the realtor not only trying to keep your earnest money but also providing misleading information with regard to the number and nature of the bedrooms.
One way or another this is a problem for the listing the agent.
The letter is very clear that the seller is trying to retain your earnest money. There are several paths that you can take. You can file a complaint with the licensing board at http://www.in.gov/pla/3171.htm
If you can tell me the county where the property is located I can provide a link for attorneys that provide free consultations as letter challenging the realtors position may be all that is necessary to release the money.
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