Expert: Karyn Foley - 6/12/2007

Question
We have sold our house and the contract agreement has been signed.  However, we now regret the decision and wish to break the contract.  Is there anyway to do so without losing our $5,000 deposit?  

Thanks.

Answer
Dear Mr. Chen:  I do not understand about the deposit.  Is this not the deposit the buyer paid into a neutral account as a good faith deposit?  If so, then yes, it is considered the seller's, however, it is held until the close of the transaction when it is probably put into the lender's hands as part of the buyer's down payment.  If you breach the contract, why would you even think that you could keep some one else's money?  The buyers are proceeding according to contract; you are making gestures to default!  This is difficult to determine as I do not have a copy of your contract, or your responsibilities with reference to inspections, contingencies, and so forth.  If you are represented by an agent, discuss this matter with your agent and you could probably be given answers.  If not, then hire an attorney as it becomes strictly a legal matter.  Your big worry should, instead, be the possibility that your buyer would hire their own attorney to force you to live up to your contract!!!!!  There can be serious issues ahead of you if the buyer intends to buy your house even if you are in the process of breaching.  You certainly should have given strong thought to this process before putting your house on the market.  If you are lucky enough to have the buyer agree to withdraw, then if you are smart, you would just give the buyer back the five thousand.  What you are asking me is if you can be the bad guy and still keep money that belongs to the good guy.  Shame on you, call a lawyer.....