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Recently I signed a home purchase agreement and have $10000…

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Recently I signed a home...
Recently I signed a home purchase agreement and have $10000 earnest money depsit with this agreement. One week before my mortgage loan closing, the mortgage comapny found (1) The seller did not disclose the pending litigation with his house developer; (2) can not provide my mortgage comapny the information to further process my loan with the time frame of our home purcgase agreement. Therefore, my mortageg loan was denied. I just want to get my earnest money back. My agent already sent a mutual release agreement to the seller a week ago. However, the seller did not sign it and never had any response. What should I do to get my earnest money back. Thanks

Yier Lin
Michigan
Submitted: 8 years ago.Category: Real Estate Law
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Answered in 14 minutes by:
6/15/2010
Real Estate Lawyer: socrateaser, Lawyer replied 8 years ago
socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 40,150
Experience: Attorney and Real Estate broker -- Retired
Verified

A typical residential purchase agreement contains provisions to require mediation followed by arbitration of any dispute. You have to follow the process, unless you are prepared to negotiate with the seller. You can figure that you will spend $2,500-4,000 to arbitrate this action, if you hire a lawyer. If you win, then the seller will be ordered to pay your attorney's fees, but if the seller has no money, then you may never collect. So, be careful about going down this path, unless you're certain that the seller can pay or has assets that you can have the sheriff seize and sell to satisfy your judgment.

 

If the seller has no money, then you may throw good money after bad, and you may be better off offering to pay the seller something to release the funds. I realize that this is the last thing that you would want to do, but if efficiency is the goal, then sometimes you just have to bite your tongue and pay to get free.

 

Hope this helps.

 

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