I'm selling my house FSBO and the buyer gave me an earnest money check made out to me. For whatever dumb reason, I held it and didn't deposit it for a few weeks.
Right after I attempted to deposit it, the buyer backed out. This was also PAST the window written in the contract when he was allowed to back out without penalty.
The next day, my bank notifies me that the check didn't clear because his account was closed. He claims it was due to him closing the account because his truck was broken into and checks and other personal material was stolen.
He claimed he was going to send a new check, but that hasn't happened, and he's stopped responding to me.
What are my best options at this point to collect the earnest money that he owes me contractually? This is on a property in Texas.
Threaten Small Claims court via writing, certified mail ... then file in small claims court if it is not rectified in 2 weeks. Scare tactic should work, small claims will work as long as you had a good contract in place.
Hope it works out without legal.
There is a reason EMD is taken in cashiers check or wire transfer.
move on. fighting is a waste of time.
next time, deposit it that day or get cashier's check!
Personally, I think you are wasting your time. Even if you end up with the earnest money, the guy is not going to buy your house. I don't know what kind of EM we are talking about, but if it is the typical $500-1000, I wouldn't even bother with it unless your goal is to collect EM and not sell the house.
There's a reason you stop at the bank on your way home with the check, to help guard against buyer's remorse. You gave the guy weeks to change his mind without risk, so he did. Next time you'll remember to stop at the bank!
Even if you are selling or buying FSBO, an escrow agent should be used. For more than one reason ...
best news you ever got probably would have stopped paying on your mortgage then you would have the expense and time of foreclosure Find an new buyer and breathe a sigh of relief
I expected that an escrow account via a title company was the norm.....wire transfer or bank draft OR No Deal..
I agree move on, if the buyer did not want to complete the transaction its better to find out asap. I would get a local title company on your side for future dealings.
Thanks everyone for the quick replies and advice. Everything was handled by the title company except the earnest money, and the contract is clear on terms, dates, etc. I have no interest in getting the buyer back, only the EMD he owes.
I appreciate the perspectives about this being a waste of time to pursue, and you're probably right. I'll look more into the fees of small claims court and the time commitment on my side and see if I want to bother.
Fortunately it was a relatively cheap lesson on my part, and easy to correct the next time.