Expert: liznarr - 5/19/2010

Question
i own a 4 plex in north dakota, and recently had an offer from a buyer. he backed out of the sale because he didnt think he was gonna get the cash flow he thought he was,but still went ahead with an apprasal that came in right where my price was, and also did a home inspection anny, he feels he should get back his 1000.00 earnst money, and i feel that i should have it based on the time that it was off the market and may have been passed up by another potential buyer, so who do you think would win in small clams court?
                  thank you very much

Answer
Hi Don,

You should check your Contract of Sale.  Look under a “Default” paragraph, which should spell out what happens in the event a Purchaser defaults.

Generally, Contracts are subject to financing.  If a lender provided this man with a legitimate “turn-down” letter, he would be entitled to receive his earnest money back.

If this Purchaser just plain “backed out” with no lender letter documenting a refusal for a loan,  my opinion is that you would have a very strong case in small claims court.

Hope this helps.

Regards,
Elizabeth