Earnest Money issues

[Ryan Barber]

So recently I purchased a home to flip and for the most part everything went fairly smooth. We originally posted the home for sale on 10/15/21 and had an offer for full price the first day. The buyer agreed to pay full price putting down $100k and financing the rest and they are paying closing costs with $2,000 earnest money. Seemed good so we accepted. I have a signed contract and now we start to move toward getting inspections scheduled but my realtor still hadn't seen the earnest money being deposited. The buyer has five business days to deposit per our contract. On 10/20/21 I get a call from my agent saying that the buyer has ghosted their realtor & broker and they never received the earnest money. Do I have any recourse to go after our $2,000 earnest money per our contract?  Any help would be appreciated. 

Thanks in advance!

Ryan Barber

[Kevin Sobilo]

@Ryan Barber, the first thing I would check is the contract in some detail. The sales contract I use CAN allow for liquidated damages over and above the deposit monies. So, if you were to end up selling for a lower amount or claim lost rent for the time it sits vacant.  Often times the buyer's offer to only forfeit the deposit though, but that should be specified on the contract.

Next, I would check the listing agreement with your agent. In my state it is common for a listing agent to collect a portion of any deposit you retain for example 50%.

So, if the agent would get 50%, how much effort is it worth chasing only $1,000.

If you are entitled to liquidated damages, I might contact an attorney because the amount could be high enough to justify.