The real estate deal fell apart. Will I get my deposit back?
What does the contract say?
First off, I am not an attorney nor have I ever played one on TV. Contracts are the perview of attorneys, and even experienced attorneys will disagree on minor points. So there are no pat answers.
But it is in your power to read the contract and find out what it says about your deposit.
For example, in the current FR/BAR purchase and sales contract line 89-91 says, “If Buyer does not receive loan commitment, then Buyer may terminate this contract by delivering written notice to seller, and the deposit shall be refunded to Buyer…”
So (in this case), did you receive a loan commitment? If you didn’t receive loan commitment did you terminate the contract by delivering notice to the seller? In this case the solution is clearly provided by the contract.
The standard Florida real estate contracts are written for just about any eventuality that will arise regarding the deposit, so the first thing you do is look at the contract to determine how the situation pertains to you.
What monkey’s things up a bit is that both the buyer and seller have to sign off for the deposit to be released. So if you have a seller that is really upset about you walking away they may initially refuse to sign the release of deposit.
In my real world experience the seller will typically calm down after a few days and sign off. But if that doesn’t happen both the buyer and seller might have to go the route of mediation, arbitration or even litigation over the deposit. The state of Florida Real Estate Commission (FREC) can even order the deposit be released to a certain party. But the legal route and the FREC route are very rare occurances, mostly because any legal fees and/or time spent preparing paperwork far exceed the value of the deposit.
When won’t you get your real estate deposit back?
Here’s a real world example from last fall.
We received a cash offer on one of our listings that the seller accepted. But the entire time we had an uneasy feeling about the buyer…their finances checked out okay and they paid for an inspection…but the signals they were giving us were all wrong. In retrospect what they were doing was holding our home off the market as choice #2, while they used the inspection period to shop for something else. Then they cancelled the contract.
But their Realtor made a fatal mistake and miscalculated the inspection period, so they had no right to cancel.
The seller let the buyers out, but to do so he requested a portion of their deposit…these buyers agreed to it and didn’t get their full deposit back. They were lucky they got anything after playing the seller like that.
If you are really unsure, if you are even contemplating breaking a contract, the best advice is to seek legal advice. We know some good real estate attorneys, call us and we’ll get you in touch with one.