if somebody buying a home, ldeposited like 50-60k in escrow account.
home inspection is done, home appraisal is done, now due to some reason, like in the mean time interest rate went very high or any other personal reason, buyer doesn't want to buy or get delayed..just wondering is there any penalty or where are these things defined?
I think rules will be same in Jersey city, Newark, Hobokon, union city, NJ, NY, Bergen county, or anywhere else...
It depends Soley on the language, timelines and clauses in the contract.
Most likely if your attorney review and home inspection period are over, you might be able to keep the EM.
Ask your attorney what is in your contract with the buyer to confirm.
Hi @Chris T. Thanks for your reply, what EM mean here?
in contract it say if buyer/seller doesn't want to do closing other party may take legal action.
EM = earnest money, deposit they put down in escrow to sign a contract to buy your house.
Your attorney will be in the best position to advise you on how to proceed
As others have said, it's 100% dependent on the contract verbiage.
In NJ, the typical contract includes some earnest money (EM) deposit, usually a couple $K at signing, then probably another $5-10K after the inspections and such.
There are usually a few 'outs' in the contract. Inspections, financing, and title. Unless the timeframe for inspections and financing have passed, it's pretty easy to use either as an excuse to get out of the context and get their EM back. If it's past those cutoff dates, then the seller can likely keep the EM.
Best bet - contact your attorney for their opinion on your specific situation.
Pretty much what others have said. If all contingencies have expired (inspection, appraisal, etc) and the buyer backs out they will most likely forfeit their earnest money. Also, the seller typically does have the ability to sue for non-performance of the contract. Doesn't happen often, but they can sue and would most likely win if they did. Again, all depends on contract verbiage and state-law.
What if buyer wants to buy, but there are delays in mortgage approval, or Lender creating issue like initially offered lower rate, now say rate is high and it was not locked earlier.
also if Buyer pulls back then seller has access to EM , but if seller pulls back then buyer doesn't has access to anything like EM...it's not fair with buyer?
Read your contract, particularly the clause relating to the financing contingency. I don't know your contract....some require the buyer to actually cancel the contract by a set date in order to void the contract and receive your EM back. Some simply allow the seller to cancel, and return EM. What your contract says is all that matters.....not what your lender may or may not have done, or whether you think the terms for either party backing out are fair. BTW, what does your agent say?
Nearly every contract has a financing contingency. You MUST read the contract then have an attorney explain it to you. Trying to have us tell you what your rights are is like a mechanic telling you how to fix your car over the phone when you say it sounds funny.
I tried to read again and again, but could not see any financing contingency...
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