Buyer losing an earnest money deposit - how does it work?

[Anonymous]

Buyer needs more time for their loan, and we are now on our THIRD settlement date.

Addendum is strict - financing contingency is gone. If they cannot make this new date, do I (seller) get all the deposit? Do realtors get a cut? Is it taxed? How does it work?

I give no F's anymore, and this is our last and final addendum.

[Anonymous]

Yes you get it all. Not sure about realtors, depends on the terms of that contract but probably not. Taxability is a good question, not sure.

[Anonymous]

Don’t they have to sign a release to allow the home to be marketed again? That always comes up here as the reason why the deposit ends up being returned because there is no other incentive for the buyer to sign the release.

[Anonymous]

I thought if a buyer attempted to get financing and it falls through the buyer gets the money back.

[Anonymous]

OP says the financing contingency no longer applies.

[Anonymous]

What does your contract say?

[Anonymous]

Anonymous wrote:I thought if a buyer attempted to get financing and it falls through the buyer gets the money back.

I should add that “financing contingency is gone” means. This sounds like there was some renegotiation of the contract or that the date has passed. Either way, you
Getting the money
Doesn’t seem clear cut at all.

[Anonymous]

OP here. There was a financing contingency in the original contract. Addendum says financing contingency is now removed.

So if it's removed, and buyer cannot meet the new settlement deadline (no inspection, appraisal already completed), they lose their deposit. Right? That's what my realtor says, but it never hurts to crowdsource lol

[Anonymous]

Anonymous wrote:OP here. There was a financing contingency in the original contract. Addendum says financing contingency is now removed.

So if it's removed, and buyer cannot meet the new settlement deadline (no inspection, appraisal already completed), they lose their deposit. Right? That's what my realtor says, but it never hurts to crowdsource lol

If there’s an addendum you need to be sure that there was consideration and also that all of the prior terms still are intact.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. There was a financing contingency in the original contract. Addendum says financing contingency is now removed.

So if it's removed, and buyer cannot meet the new settlement deadline (no inspection, appraisal already completed), they lose their deposit. Right? That's what my realtor says, but it never hurts to crowdsource lol

If there’s an addendum you need to be sure that there was consideration and also that all of the prior terms still are intact.

The seller granting a time extension qualifies as consideration.

[Anonymous]

Buyer needs a new lender ASAP

[Anonymous]

Even though that is what the contract says, I don't think it actually works that way. We had a similar situation and our realtor said that we wouldn't get to keep their deposit. We moved on and found a new buyer. Not sure if it wasn't worth the hastle for us or our realtor.

[Anonymous]

Agents have never let us keep a deposit. It's a joke, buyers always get it back it seems.

[Anonymous]

A few things to consider: is this your first time selling a house?

you will undoubtedly go to settlement with this buyer before the next buyer who goes under contract, who may also have issues and need an addendum.

The buyer still wants to buy the house, why are you so inpatient? I’m sure the buyer also wants this to be over.

If you terminate the contract because you won’t sign an addendum and the buyer presents you with one, is operating in good faith, and is working as quickly as possible to resolve lender issues, I doubt this qualifies to entitle you to the earnest money deposit. And frankly, it shouldn’t. You’re being a PITA.

[Anonymous]

Read the contract instead of asking people on this site who give incorrect info about 75 percent of the time.