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Backed off from the purchase contract and lost the earnest money.

Indianapolis, IN |

We were in purchase agreement for one house . During inspection it was discovered that there was prior treatment for subterranean termite. Although the seller claimed that the treatment was preventative there was no follow-up documentation or inspection reports regarding termite activity. We decided to back off and asked for our earnest money back. Couple of days later seller sent their request to keep the money. Meanwhile our Realtor started putting pressure on us to buy the house without providing any help to retain our earnest money. We got fade up and signed the document to give the earnest money to the seller. I think by signing the document we lost our claim, but feeling miserable at this point, is there any way to get our earnest money back?or teach a lesson to realtor?

The earnest money was $3400

Attorney Answers 2

Posted

You do not tell us how much earnest money was involved, but probably more than a consultation with an attorney before having let it go. First, if the purchase agreement has a mediation and/or arbitration clause, that must be followed in any effort to recover the money. Otherwise, you may sue in the court in the county where the seller resides. The fact that you signed the agreement releasing the money under bad advice of your fiduciary (agent) is a negative but not fatal circumstance. Again, this is all about economics and whether or not there is sufficient value to expend the time, money and effort to recover your deposits.

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Posted

You may wish to consult a real estate lawyer for advice but it sounds like you have an uphill battle at this point, especially since you signed the agreement to release the earnest money. The real question would be whether you had good cause to back out which from what you said may be speculative itself. Again, probably best that you find a real estate lawyer and seek some advice.

Advice on this forum is for informational purposes only and should never be mistaken as a substitute for legal advice. If you are in need of legal advice, you should consult local legal counsel.

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