Legal Question in Real Estate Law in Massachusetts

Earnest Money Deposit

A buyer offered to purchase our property and put down 2000 deposit to bind the offer. The offer was initially rejected based on price. The offer was revised with the new price, accepted signed and initialed by all parties. The buyer had an inspection which resulted in issues. These issues were worked through and resolved/agreed. The respective attorneys were contacted to do the P&S agreement. One day later the buyers attorney contacted my attorney to tell them that the buyer had decided to back out because the ''wife had too many concerns''. Can the buyers back out, what recourse do I have, and should they get their deposit back. The P&S deadline is tomorrow at 5 p.m.

Asked on 6/02/09, 6:05 pm

3 Answers from Attorneys

Herbert Cooper Law Offices of Jameson & Cooper
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Re: Earnest Money Deposit

Echoing the other responses, your attorney will probably recommend that you release the deposit in return for a termination of the accepted Offer to Purchase. You don't want the property "tied up" with this contract while other potential bidders are out there, and the "earnest money" deposit is not worth your time and money to fight over, in general. You could end up losing more than $2,000 in a reduced purchase price just to chase this.

At the end of the day, you want to sell your property without hassle, not be tied up in court.

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6/03/09, 9:38 am
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Re: Earnest Money Deposit

Assuming the Offer is contingent upon execution of an acceptable P&S and it was not signed and there is nothing to show that there was a real meeting of the minds, they can probably walk away with the deposit. Moreover, the resulting legal fees if taken to court would make the $2,000.00 not worthwhile. Were the inspection issues as resolved and agreed put in writing and signed by both parties? if not, they probably can walk away.

Only makes sense if the attorney thinks they can sue to enforce the offer as written and try to force the sale. Since I have not seen the offer and the subsequent emails etc, I can not comment on the likelihood of success. Most attorneys will tell you until at least the P&S is signed the Buyer can walk and get the deposit back.

While you might have a lawsuit, no one can advise you definitively without actually reading the offer and any subsequent agreements, emails etc.

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6/02/09, 6:22 pm
Christopher Vaughn-Martel VAUGHN-MARTEL LAW
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Re: Earnest Money Deposit

Whether the buyer is entitled to walk away from the deal together with his or her deposits depends on the terms of the Offer to Purchase. It sounds as though you have an attorney, so you should talk to him or her about it!

If you are not currently represented, you may want to sit down with an attorney before refusing to turn over deposits - as you could be inviting a lawsuit.

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6/02/09, 6:22 pm

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