Earnest Money Dilemma - UPDATE

[kenimpzoom]

I am selling my house, buyers put down 500 bucks earnest money. Now they say husband lost job (can't verify). They say they are still trying to buy the house.<br /><br />Question is, if they cant buy the house, should I give back the earnest money. Legally it is mine.<br /><br />What would you do?

 

[rwise]

Re: Earnest Money Dilemma - UPDATE

just sold a house and it looked for a while as though they were going to fall through. They had just lost a home to fire and really wanted the one I was selling. I did extend the deadline several times to work with them, and they got it worked out. But if they had fell through, I earned the money! Though it would have been hard for me to make them pay it, they have 9 kids,,,

 

[Kwas]

Re: Earnest Money Dilemma - UPDATE

You have a contract. If your contract provides for you to retain the escrow deposit on default, you should. It happened to me twice on the same house. I lost a house that I had a contract on and that was just compensation. <br />the second time I got screwed around for 4 months and that deal fell through. I had to sue to retain the escrow.

 

[aspeck]

Re: Earnest Money Dilemma - UPDATE

It really depends on how they have presented themselves to you, how they presented the reason for backing out, etc.<br /><br />I sold a home 2 years ago. Only took $500 earnest money. Then it looked like it was going south. However, the people were so nice, polite, apologetic, etc. They made it easy to extend the deadline and keep them in the lead for the house. In the end, closing was 6 months after it was supposed to happen, and I had several hundred dollars in interest expense that I was not planing on, but a wonderful couple had a house that grew up in, and I was glad for that.<br /><br />So, it depends on the people, IMHO.

 

[one more cast]

Re: Earnest Money Dilemma - UPDATE

I would ask where the husband worked and check out if they are telling the truth. If he did indeed lose his job I would give it back. But thats just the kind of person I am. I like to have money but there is no way I will let greed take over my life. Do what feels right to you.

 

[ae708]

Re: Earnest Money Dilemma - UPDATE

I had the same thing happen to me a couple of months ago. The deal on my house fell through and I returned the earnest money. People said I was crazy for doing it but I'd like to think that someone would extend me the same consideration if I had problems...... although I doubt it.

 

[JasonB]

Re: Earnest Money Dilemma - UPDATE

Judgement call. Legally it is yours, but if their story checks out, I would probably refund most if not all.

 

[LadyFish]

Re: Earnest Money Dilemma - UPDATE

Personally, I would keep the $500 "non-refundable" deposit and extend the contract one month. This at least gives him a chance to find a job. <br /><br />At the end of that month if he still dosen't have a job or they can't get pre-approved for a loan I would keep the $500 and not get into another contract with them.<br /><br />The way I look at it is you would be given them athe benefit of the doubt which is more than they would get from anyone else. Also, it would only hold you up a month which will take you right into peak selling season. <br /><br />If the house is hard to sell you may have to reconsider renewing their contract at the end of the one month.

 

[tommays]

Re: Earnest Money Dilemma - UPDATE

Wow up here you have to tie up more like 10,000 dollars when you sign a contract on a house.<br /><br />This is interesting to me because when i bought my last house 8 years ago there was a problem with the Bank Appraisal on the house.<br /><br />So the guy gets mad and decides to keep my 10,000 dollars after a lot of fighting and setting up camp in front of his house handing out info to other buyers he finnaly gives back 9,000 dollars.<br /><br />I had the last <br /><br /> When the real estate company i had hired to sell my old house and find me this one tryed to get there money at closeing i had it put into Escrow until they agreed to give up the other 1000 dollars <br /><br /><br />tommays

 

[RubberFrog]

Re: Earnest Money Dilemma - UPDATE

$500? Why so little? I'm with Tommays, around here people drop 15-20K. $500 makes it easy to be nice....

 

[neumanns]

Re: Earnest Money Dilemma - UPDATE

500 is a pretty low ernest money, You took that money and withheld the home from other potential buyer's, you earned that money. However if he did lose his job I would refund it, But if he is still working there he is just trying to get out and get his money back....toufgh luck! <br /><br />Tell them if THEY can verify loss of employment they can have the money back.(seems fair to me)

 

[JRJ]

Re: Earnest Money Dilemma - UPDATE

$500 might be a lot of money to someone without a job. How will they get financing without a job anyway? Are you selling the house yourself? Did you really take the house off the market for $500? In furture, get serious ($10,000)"earnest" money and continue to take backup offers until you are positive the escrow you are in is going to close. Lots of buyers will tie up a house and continue to look for something better if they didn't have to put up much money. Happens around here a lot.

 

[KRS]

Re: Earnest Money Dilemma - UPDATE

Most contracts have a clause that allows the borrower/buyer to back out and cancel the contract without losing their money when they are unable to obtain financing, which a job loss would cause this problem. The line reads "subject to approval of financing".<br /><br />Read your contract, it will state if this is the case, every residential contract I've ever seen has this clause in it.

 

[Reel Poor]

Re: Earnest Money Dilemma - UPDATE

Originally posted by KRS:<br /><br />Most contracts have a clause that allows the borrower/buyer to back out and cancel the contract without losing their money when they are unable to obtain financing, which a job loss would cause this problem. The line reads "subject to approval of financing".<br />

And to that line I insist that the word acceptable be added, So the line reads: "subject to approval of acceptable financing" . This way your not hooked by outragous interest rates, closing fees, ect.

 

[eeboater]

Re: Earnest Money Dilemma - UPDATE

Hey KIZ... I'm thinking that if this guy really did lose his job, it is probably a good idea that he does not get this house. In fact, from my experience with working at a mortgage lender, unless the wife makes a LOT of money, they will never get a mortgage. Well, I suppose there are a few exceptions. Anyways, if I were in your shoes, I'd give them a deadline of the end of the week or something and say if you get back to me before then I will give you the earnest money back... if not, they lose it.<br /><br />Sean

 

[kenimpzoom]

Re: Earnest Money Dilemma - UPDATE

Update, after we threatened to keep the 500 bucks, they have decided to buy the house. We extended the deadline to next Friday. I'll believe it when I have the papers signed.<br /><br />I cant check anything out on them, they are in Las Vegas and I live in Baytown, TX. The job loss thing sounded kinda fishy cause they are moving all the way here.<br /><br />Actually 500 dollars is normal amount for the value of my house.<br /><br />I put down 200 dollars when I bought it the first time. I moved in with less than 1200 dollars total out of pocket.<br /><br />My new house I moved into wasnt that much more expensive.<br /><br />You guys up north and out west take it in the shorts for everything. Texas is dirt cheap man.<br /><br />Ken

 

[Reel Poor]

Re: Earnest Money Dilemma - UPDATE

Alright... Good news. Ill have to say I was supriised by the poll. Ill also say that if you had lost an honest sale while holding his deposit wating on him to square away paper work and what have you, I would then keep the deposit. My vote was based on the fact that he may have really lost his job.<br /><br />Hows the new house coming along?

 

[kenimpzoom]

Re: Earnest Money Dilemma - UPDATE

Update: the house just sold and my real estate agent got some extra cash out of them cause they took so long.<br /><br />Whewwww, big release of tension off my mind.<br /><br />Ken

 

[18rabbit]

Re: Earnest Money Dilemma - UPDATE

Need to look at what earnest money is, what it was. Used to be it was a way to “seal the deal”. That and a handshake. Today, earnest money doesn’t carry the same weight it used to due to all of the contract law.

 

[Bondo]

Re: Earnest Money Dilemma - UPDATE

Originally posted by KenImpZoom:<br /> Update: the house just sold and my real estate agent got some extra cash out of them cause they took so long.<br /><br />Whewwww, big release of tension off my mind.<br /><br />Ken

Coool...... I Love a Happy Ending........<br /><br />It Must be that I Really Do live in the Backwoods,..... Just not as Deep in the Backwoods as OMC........ <br /><br />The house I bought back in December,... I handed over $50.00 as Good Faith Money...........