More details to this question:
I am a real estate agent. I represent the seller of a property. We received an offer to purchase, contingent upon the sale and close of a home in another state, offering zero as an earnest money deposit. We countered the offer with a number of items, one being “Buyers to provide a non-refundable $6,000 earnest money deposit (equivalent to 1% of the purchase price) to be held in the escrow account of (my brokerage). EMD shall be applied to buyer’s down payment upon closing. In the event that seller accepts a viable, non-contingent offer, EMD shall be returned to buyers in full”. The buyers agreed to the terms of our counteroffer. They are now withdrawing based on inspections and expect to receive the EMD back in full. My seller specifically included that the EMD is to be no -refundable. The buyer’s agent claims the EMD should revert back to the buyers regardless of the “non-refundable” portion. Can you please help me understand this?
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Assuming both parties signed, this opinion is based solely on the facts as presented and reliance on this is at your own risk:
1. it appears there is a binding contract
2. the inspection WAS not a contingency of the EMD.
3. I would have to see the agreement but as I read what you posted, the acceptance of another non-contingent offer from another buyer might trigger returning the EMB from Buyer 1. You probably can read the Agreement as meaning you can hold the money until you have another offer on the property.
4. IF the house does not sell or you get no other offers, so long as you in actual good faith do nothing to prevent the sale to any other buyer, at some point, when it is clear the house is not selling, the EMD can probably be deemed forfeited.
Again this is based solely on what has been presented and is not my formal legal opinion and no attorney client relationship is created by this answer. You are encouraged to hire legal counsel on this.
Answered on Apr 06th, 2024 at 9:31 AM