Earnest Money Issue in Houston

Earnest Money Issue in Houston

Rental Property Investor · Phoenix, AZ · Member since 2015 · 222 posts · 126 votes

Good Afternoon BP Members! 

I've got an issue and was hoping to get some advice to push me in a direction in which I should go. 

A couple months back, we found some condos we wanted to purchase/and or wholesale. We put everything under contract and put down $5,000 earnest money to hold. 

In our contract, we had an inspection period in case financing fell through or our buyers fell through. Our contract says: 

"Buyer shall have up to 15 days before close of escrow (the "inspection period"), which is May 20th, 2016, during which time Buyer will have the absolute right to cancel this contract for any reason whatsoever, in buyer's sole and absolute discretion."

We executed our inspection period opt out and sent in the cancellation form to our title company, to which they sent out a release of earnest money to me and the seller. The seller emails back, "Before acknowledging or signing this release, I want to gather all the facts (emails & texts) to determine the possibility of a breach of contract with my attorney." 

Now the title company is telling us they can't release the funds because of what he said, even though our contract says differently. 

Does that make sense? What would you do in this situation? Hire a lawyer and have him look over everything and speak with the title company?  

I understand a lot of advice like this would need to be confirmed by an attorney, but even a kick start in the right direction could be quite useful. Thank you!  

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  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    The title do. doesn't make a decision, no matter what the contract says.  Without a release signed by both parties, off to court you go.  This was 90 days ago, what's happened since?

  • Rental Property Investor · Phoenix, AZ · Member since 2015 · 222 posts · 126 votes
    10y

    @Wayne Brooks The past 90 days have been my fault. I should have reached out the seller and spoken with him. Ask if maybe we can split the earnest money, or give him some of it, so we can all walk away happy. 

  • Houston, TX · Member since 2011 · 115 posts · 70 votes
    10y

    I always thought these option contracts worked by giving the buyer the right to purchase for a certain amount over a given amount of time and the seller of the contract was obligated  to sell the property for the same amount over the same amount of time.   That's what I thought was the risk of flipping these notes.

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