How to get Earnest money back.
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How to get Earnest money back.
I had entered into a Purchase agreement on May 14. Our closing date was to be June 6th. About June 4th, my lender informed us that they would need an extension until the 14th to close. I agreed and seller agreed but wanted to change possession date until the 19th. I did not agree to this. On June 8th, sellers agent asked again if I’d agree to allow possession after closing, I did not. He said that the seller was going to ‘look into the costs and logistics of moving’ and he would get back to us on the 9th. We did not hear anything else from the agent or seller until June 17th when he stated that the seller would not be signing anything until he spoke with an attorney.
The seller was in the foreclosure process and the home had not been maintained. I was already looking at putting AT LEAST 5k to remedy the cosmetic and deferred maintenance on the house. Knowing that the original closing date was the 6th, the seller had not even started moving out. It was my opinion that the seller had no intention of moving and had I allowed them to stay after closing I would have been put in a position to have to evict them.
What are my options at this point to get my earnest money?
Asked on June 19, 2017 under Real Estate Law, Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Do you have anything in writing changing the closing date? And if so, were you ready, willing, and able to close on the new date? If you did--if you were able to comply with a new closing date agreed to in writing--and the seller did not carry through and close, then you coud sue him for breach of contract to recover your earnest money and possibly additional compensation.
But an oral agreement to delay closing does not modify a written contract with the original closing date--a written agreement must be modified in writing. So if you did not get the change in writing, then *you* were in breach when you did not close by the 6th (even if your breach was due to your lender; the law doesn't care if you violated your obligations due to a third party--all that matters is your violation). Similarly, if you did get a written change of date, but were not ready, willing, able, etcl. to close on that new date, you again breached, and could not get the earnest money back. To recover your earnest money, you'd have to be able to show (in court, in a lawsuit--if the seller does not voluntarily give you the money back, your only way to get it is via suing) that you fully complied with a written agreement and the seller did not.
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