I posted a while back about a possible earnest money dispute. Well, as it turns out, it looks like I'm going to need an attorney. Does anyone have a recommendation of an attorney that is willing to help with a $2000 earnest money dispute? The contract is for a property in Cherokee County, I'm in Fulton County, so ideally someone north of Atlanta, but I'm open to anyone willing to help with this. I'm finding that the attorneys do not want to mess with this since it's "small beans".
The short version is the MLS, tax records, appraisal and seller said the property was 1acre. After the DD period, the seller's agent sent an amendment with an update to the property description showing it was 0.29 acres.
The seller signed the warranty deed when she purchased the property (with the current legal description) and signed the amendment of property description last month (so, the two times she's signed the legal description, with the latter going to the point to initial beside the 0.29 acres on the plat).
The original closing date was missed because of going back and forth on price because what we thought we were buying isn't what we were buying. The agents made the deal work for me again (by pitching in some of their commission), but it was after the closing date.
Any suggestions would be appreciated! :)
@Erin Church Did the property actually close? I am assuming you were the purchaser but I’m unclear because you indicate that the agents kicked in the commission.
Or are you saying that you ultimately backed out due to the error but since it was after DD, seller wants to keep your deposit?
We did not close. I am the buyer. The seller wouldn't budge on price after we found out it was 0.71 acres smaller, I wouldn't buy at the current price, so the agents kicked in commission towards closing costs and purchase price. So that the seller got her original price and I got a reduction in price. If I'm being honest, I don't know why the seller feels entitled to the EM. We would still buy if they would just sign an amendment, but they have said they will not.
Ok so what I’m unclear about is are you saying that the agents’ attempt to save the deal wasn’t enough? In other words, you feel a further reduction is warranted?
Is the amendment you’re seeking an additional price reduction?
Lastly, when you requested the earnest money back IN WRITING, what response did you get? And from whom?
Also, when did the deal officially fall through? You didn't sign releases I assume? Is this a cash deal or mortgage? Did you use a standard MLS contract?
The amendment is only to change the closing date. We are in agreement on price - the agents made it work for me and didn't impact the money going to the seller. So, the money part is worked out.
This is a mortgage situation. We did use a standard MLS contract.
They gave the verbal this morning that they would not sign an addendum to the original contract, would not sign a new contract with a financing contingency and would not "let go" of the earnest money without a fight. It's being held by a closing attorney currently. So, it isn't dead officially because neither side has terminated the contract, they just won't sell it.
(We need the financing contingency with a new contract because a new contract means it has to start at square 1 with underwriting. Shouldn't need to use it, but just to have a CYA policy for myself.)
Ok with all of that said, if they won’t sign the amendment, you’re deal is essentially dead. I was asking all of those questions to see where you were. I am a non practicing attorney (so not giving legal advice), but I can refer you to an attorney. Problem is what you originally noted. $2,000 is a small amount in terms of hiring someone. Best course of action may be to have an attorney send a strongly worded letter for you and hope that works. If it doesn’t, you may have to go to small claims yourself but from what you said, it sounds as though you should be able to get your escrow back. In truth, you never got a mortgage. Did you let that contingency date pass?
The all contingency periods did pass. They sent an amendment for property description on the 16th, but it was missing pages and we asked for a complete one. On the 17th our contingencies expired, on the 20th, they sent the second property description amendment with all the pages and that's when we realized the 0.29 acres (three days after).
I agree with you about the $2,000 being a very tiny amount to an attorney. It is a not as tiny an amount to me though.
I appreciate you taking the time to ask me questions and try to help :) I may not end up with a property from all of this, but I'll have one heck of an education. :)
I think the first thing to do is to have the agent (in writing) Express that you are seeking to cancel the contract unless new amendments are signed. Further, you do not agree to release of your escrow funds.
Even in this tight market, the right house will come along.
As I stated, stay in touch because I can probably get an attorney friend to write a letter on your behalf and it not be too expensive. After that, small claims may be your best option because any attorneys fees would eat up the $2,000. But think of it this way, seller is in the same position. Seller can’t just keep your money either without hiring an attorney too. So, they may be more reasonable once they understand this. No funds can be released to seller without your signature.
I will PM contact info for my attorney I use. Hopefully it helps @Erin Church
NEVER let an attorney hold earnest money, they are not subject to the same rules a Real Estate Firm must follow.
I wanted to follow up on this and share a valuable piece of information I learned. Signing a unilateral extension is agreeing to buy the property with all known information about the property. So, in this scenario, I would have lost my earnest money.
The bad news is that we didn't end up getting the property. The good news is that the second offer they had sent for us to sign didn't have an expiration date. So, we signed it, sent a unilateral extension (as we only had about a day left on the contract to close), my awesome team pulled it all together, I wired the money, went to closing and the seller didn't show.
We could have sued for specific performance, but I didn't want to tie up more time and energy on the deal.
The second and third take away is that everything in real estate should have expiration dates and having a killer team is priceless! :)