Any recourse against End Buyer who backs out?

Question

Grrr....Assigned a contract to an End Buyer who just decided to not show up for the closing!  Called him after receiving a call from the Title company.  He said he's not sure anymore but will let me know tomorrow.

He gave a $2,000 REFUNDABLE deposit (I know, this was my first mistake).

I'm just wondering what I might be able to do.  Can I just not sign the release of deposit or can I demand that we split it?  I'm not concerned about keeping a relationship with him.

Any suggestions? Thanks.

Account Closed · Answer

without knowing the details of the contract, i'd say give the deposit back, bc it's refundable...lsat thing you want is a reputation that you're a 'deposit thief.'  then nobody will do business with you..lesson learned, don't do refundable deposits anymore..this wil eliminate tire kickers and help you to concentrate on serious buyers only.

Eric M. · Answer

I wouldn't worry too much about your "reputation" as a deposit thief.  The buyer is the one who didn't perform.
But actually getting the money is easier said than done.  In my state at least, the seller has to agree that he loses his deposit.  I have a situation from years ago where I felt I deserved to keep the deposit but the buyer fought it.  I offered to split, no deal.  So it just sits in the Realtor's escrow.
They tried to sue me for it and lost but I still can't get it.  I would have to sue them to get it but it isn't worth it.  So again, it just sits there for years and eventually will probably become some of that "missing" money you read about and will go to the state.
My state needs the cash so I guess that is ok!
In my opinion, earnest money has become a joke.  It is of almost no value because of so many loose contingencies in contracts and because the sellers always just cave and give it back.  So when a situation comes along where I think I am honestly entitled to keep it, I take a stand on principle.  Makes you look like a tool a little bit but someone has to stand up for the rules.

J Scott · Answer

As Bryan alluded to, the details of the contract should spell out under which circumstances the deposit is refundable and under which circumstances it is not.  That will be the determining factor of what you get to keep.

As you learned, in the future get a non-refundable deposit and do some research on your buyer...

Account Closed · Answer

i agree with you guys on al points, except he said it was a refundable deposit...his mistake..don't repeat it

Nemi W. · Answer

Right now I'm agreeing with Eric. Probably because I'm so dissappointed in him not notifying me or anyone before the closing that he wasn't going to be able to come through...he just didn't show up!

But Bryan and J Scott, I CERTAINLY learned a lesson!  I stressed NON-refundable for 2 weeks, then caved in when he voiced concern at the last minute.

Eric, you said the "the seller has to agree that he's losing his deposit".  Did you mean "buyer"?

Bryan Hancock · Answer

Earnest money is a joke.  Make sure it is definitively hard the next time you do one of these deals.   I would fight tooth and nail to get it...you aren't a thief for doing what you said you would do!

Any recourse against End Buyer who backs out?

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