We have a Release of Contract on the first purchase agreement for our house at 420,000 with $3,000 in escrow. Verbally told by their realtor it was due to inspection BUT the inspector hadn't given them report yet!! What do you advise? Are we at least entitled to the Escrow amount? We have to respond to a second offer by 5 today for $410,000.
Thank you for stepping in on this stressful day.
If it was an "as-is" contract, the Buyer can cancel for any reason. It is likely that the Buyer obtained a verbal report from the inspector as to some defects that they did not want to deal with and cancelled the transaction based upon that verbal report. And, they are clearly within their rights to do so under the "as-is" form contracts in urse in Florida.
You also may have an obligation to disclose any defects that this new inspection revealed that were communicated to you. I strongly suggest that you consult with an experienced real estate attorney to navigate through the details of the cancellation of the first contract and your potential execution of the second contract.
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Realize that Avvo lawyers can't and don't "step in" to your particular contract issue. We haven't reviewed the contract you and the other party have signed, and we don't know what the parties' respective rights are. For that, you need to ask your own realtor, and your own lawyer, who will be familiar with the details of your situation.
Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.
The answer to your question depends on the wording of the contract you signed with the buyer. Most "as is" contracts give the buyer an absolute right to get out of the deal during the inspection period. Other contract forms may require the buyer to specify the defect found in the report and give the seller a chance to cure. You should read your contract carefully to see what it requires. If you are not sure of your rights, you should consult an experienced real estate lawyer in your area.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.
Real Estate Attorney
I suspect that the answer to your question is that you cannot keep the deposit. A typical "as-is" contract provides the buyer the opportunity to walk away from the contract and receive their deposit back during the inspection period for any reason. If they are within the inspection period, the buyer can typically cancel the transaction for almost any reason and the seller has no method for recovery. Please be aware that this is a general observation regarding "as-is" contracts. Your situation may be different. The terms and conditions of your contract are going to govern your situation, and without reviewing the contract, an attorney can only guess as to whether you can retain the escrow deposit. I would encourage you to retain an attorney to review your contract and determine if you can make any claim to the deposit.
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