Loss of 3% deposit due to backing out.

slycat

Diamond Member
Jul 18, 2001
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Scenario:
You are offered the property and are expected to get the loan to close in a month. You put 3% at the escrow. However, at the end, you find that you cannot get a decent loan to close and have to give up the offer. How can you get back the 3% or possibly negotiate less loss? Or are u guaranteed sure loss of the 3% to the seller?
 

kranky

Elite Member
Oct 9, 1999
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Was there a contingency in the contract related to obtaining financing?
 

slycat

Diamond Member
Jul 18, 2001
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Originally posted by: kranky
Was there a contingency in the contract related to obtaining financing?

no contingency. but they don't automatically get it right?..i mean, they got to sue the buyer for it if the buyer doesn't willingly agree to give it up.?
 

kranky

Elite Member
Oct 9, 1999
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Who is holding the 3%? The seller? The seller's agent? I'm assuming it's not in the control of the buyer.

If there is no contingency, it's likely that it is completely up to the seller's discretion whether to return the deposit. If I was in that position, I would contact the seller directly and see if something can be worked out. Don't go through the agents.

The purpose of the deposit is to compensate the seller for any damages related to the deal falling through (except for the possible contingency clauses, of course). That's the whole idea - the seller gets a deposit to protect him if the buyer backs out unreasonably. If the buyer could just demand the deposit back for any reason, it's not of much value to the seller.