Assignment of Contract Earnest Money
I have been helping my mom look for properties since she is retired. She has a self directed IRA in which all funds have to come out for purchasing properties. She found a property and put 2000k for earnest money on the wholesaler Assignment of Contract. She cannot get funding through traditional financing and hard money because Fannie does not want to see IRA owing the house. My mom told the wholesaler the check she is writing is not valid because the monies have to come out of her IRA account. She could not get the funding so she cancelled the check for 2000k, now the wholesaler says Title company will persue legal action for breach of contract. My questions is the assignment contract is not a Trec form and does this contract hold any merits? The assignment contract does say buyer hereby agrees to pay original buyer non refundable earnest money in the amount of 2000.00. Earnest money to be credited towards agreed upon assignment fee. Is this really enforceable since this is not a true Trec contract or real estate agent was not involved?
Most Popular Reply
The title company is not a party to the contract and as such, they can't pursue an action for breach of contract. They can take issue over the check (and any fees the the T.C. incurred for the check cancellation), but I doubt the title company will make a stink over it. However, your mom "may" have breached her obligations under the assignment agreement so she might want to seek legal counsel to get this resolved sooner rather than later.