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How do I get my earnest money back in a fraudulent situation?

Edwardsville, IL |

I put money down on a house and the deal fell through after inspection. Seems there was no hot water heater or furnace fully functioning. Seller offered some $ at closing but my loan officer said house had to be habitable by the closing date. 4 days after the seller's deadline I submitted a termination agreement. Within a couple hours, the seller offered to do have repairs done before closing. By then my loan officer said his own deadlines had been forfeited as a lender due to some guideline about having an appraisal 15 days before closing, so I now was not qualified to get the loan. So he put that in writing. The house closed a month later with other buyers (but did not disclose info found in my ASHI home inspection). Now the seller still will not release my earnest money. What can I do??

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Attorney answers 3

Best Answer

Without reviewing your purchase agreement, it is impossible to know if you are even entitled to the earnest money. Was your agreement contingent on financing? On a favorable inspection? Who has the earnest money? I certainly hope it is not the seller. As previously mentioned, your attorney should assist you with this. If you do not have one, now would be the time albeit a bit late to hire one.

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Speak with your attorney about securing your earnest money. No attorney? Big mistake. Contact the real estate agent who should be holding the money and request return - in writing. No agent? Contact the seller's attorney - in writing ad request return. No seller's attorney? You will have to sue in small claims for return of your earnest money. Usually sellers do not directly hold earnest money. Their real estate agents or attorneys hold the money.

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If you terminated the contract within the time periods allotted for the home inspection and/or financing contingency then you are should have the earnest money returned. Have a lawyer review your contract and draft a demand letter. If this is unsuccessful you can bring suit for the return of the money. There are lots of deadlines and red tape in real estate contracts and things must be dealt with properly. A good lawyer will be able to determine this and will be able to resolve it for you quite simply.

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