My husband and I entered into an agreement to purchase bare land in April. Per the agreement, we paid $433 in earnest money and then we were going to pay $433 per month for 7 months for a down payment and then close in October. Well, we have had some financial difficulty and need to back out of this agreement before it closes. In the paperwork it stated that in the case of buyer default the earnest money would be forfeited, we are fine with that, but what about the down payments we have made for the past 5 months? Do we get those back?
1 Answer from Attorneys
Your agreement would have to be reviewed to see what you agreed.
If the seller was the one who wrote the agreement, the seller likely wrote the agreement so that all your payments would be forfeited to the seller if you default.
On the other hand, if the seller was not represented by an attorney or the seller was no experience in writing agreements, the terms of the agreement may not be so favorable to the seller that the seller would keep all payments.
The way for you to find out definitely likely is to have an attorney review your agreement and the related information.