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I have just lost a real estate deal because I could not get…

I have just lost a...
I have just lost a real estate deal because I could not get a loan that I could afford. The sellers have decided to keep my $4,000 earnest money deposit. Is there any way to retrieve those funds?
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Answered in 20 minutes by:
3/16/2018
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 43,074
Experience: 17 years real estate, Realtor. Landlord 26 years
Verified

Hello and welcome! My name is ***** ***** I am a licensed attorney and will try my best to help with your situation. There may be a slight delay in my responses as I type out an answer or reply.

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What state is this in?

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Did your purchase contract have a financing clause in it that states you can back out if you can't get financing?

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thanks

Barrister

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Customer reply replied 5 months ago
Hello Barrister,Thank you for responding. Answers to your questions are below.
What state is this in?
TexasDid your purchase contract have a financing clause in it that states you can back out if you can't get financing?
The actual purchase contract did not, but I was the assignee for an Assignment for the purchase contract, and as such was assigned the contract in a Third Party Financing Addendum in which it stated that the interest was not to exceed 12% and 3 pts on the loan. Those parameters were exceeded, with the lowest points being 4, which made it impossible to do the deal.Regards,
Price Hall(###) ###-####cell

Ok, so did the seller agree to the financing addendum?

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What are they claiming their grounds are for retaining the earnest money?

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Customer reply replied 5 months ago
I don't think the addendum could have been considered executed without the Buyer's signature, given that is what it stipulates on the agreement. It does not say Assignor, it says Seller. I have asked the Assignor to send me a copy of the fully executed Addendum. The only copy I possess has only my signature on it.And this was the realtor's response from the seller as to their grounds for denying my request for the return of my earnest money:
As stated in the 1-4 Residential contract, 15-B the contract is in default.
Here is 15-B:
15. DEFAULT: If Buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract. If Seller fails to comply with this contract, Seller will be in default and Buyer may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money, thereby releasing both parties from this contract.If you believe that I have a solid footing for the retrieval of my EM, I will be happy to spend the extra funds and get on the phone with you. And I do know that the amount of money we are talking about is much less than your normal rate. Thank you for your assistance.
Regards,
Price Hall(###) ###-####cell

Ok, here is the thing...if the seller never agreed to the financing addendum, then they aren't legally bound by that.. If that was something that was agreed to by the person who assigned you the contract, then they are the one who is on the hook for refunding the earnest money to your, not the seller.

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But if that was just stuck in there and neither the seller nor the assignor signed it agreeing to it, then you are just kind of stuck here.... you have to have somebody on the other side of the addendum agreeing to it in order for it to be legally binding..

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The phone call offers are auto generated by the website, not me personally. I do not participate in the phone call program for the site and limit my interaction with customers only to the website because I like to have time to think about a customer’s question and research it so I can provide the best answer possible in writing.

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However, if you have requested a phone call with an attorney, your request will post to other experts that do offer this service. When another attorney accepts your request you will get additional instructions.

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Customer reply replied 5 months ago
Ok. Understood. I am waiting for the Assignor to email me a copy of the fully executed Addendum. I guess that will tell the story. When I receive that, if it raises new questions, may I reach out to you to complete this via this messaging system?Regards,
Price Hall

Sure, you can reply to the thread even after you have rated my service and I will respond...

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It was my pleasure to work with you and help with your question. If you ever need me in the future, you can post a new question with "For Barrister" in the title and the JustAnswer employees will get it to me.

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If you feel I have answered all your questions, I would very much appreciate a 5 star rating by clicking on the rating scale on your screen as that is the only way I receive credit for my work.

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Thanks much

Barrister

Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 43,074
Experience: 17 years real estate, Realtor. Landlord 26 years
Verified
Barrister and 87 other Real Estate Law Specialists are ready to help you
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Customer reply replied 5 months ago
Thank you. I will definitely give you a 5 star rating.Regards,
Price Hall
Customer reply replied 5 months ago
Barrister, I have just received the fully executed copy of the 3rd party financing addendum signed by the Sellers stating that the points for the loan should exceed 3pts. They did exceed that by a point with the interest also being too high to allow me to get the deal finded. Your thoughts? Price Hall

Then you would be entitled to back out of the deal if you can't get financed under the terms agreed to by the seller and get your earnest money back..

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Customer reply replied 5 months ago
Barrister, one last question on this matter. The sellers have offered to pay me $1,000 less than my earnest money deposit, saying that the contract is void, and that my (the Buyer) non-performance disqualifies me from any portion of the EM for a refund, under any circumstances. So, my final question is, based on the Seller executing the 3rd Party Addendum, do I have a leg to stand on if I chose to take them to court for the additional $1,000, or should I just take the money they are offering me and be done with it?Regards,
Price Hall

Honestly, it depends on whether you think it is worth your time and trouble for $1K.. I think you have grounds for a full refund as the contract seems crystal clear to me and the seller is simply trying to make a cash grab...

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Customer reply replied 5 months ago
Thanks for your response .

You are very welcome..

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