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Buying or Selling a Home/Need ask about earnest money!

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Expert: John Hendricks - 12/2/2007


Question
Hi John,
My wife and I went to shop the new house and chose the Plantation Homes Builder just one week ago.  We decided to get the lot and they will build the house for us while they set up realtor to sell our old house. In the mean time, they asked our earnest money for a good faith and we gave them a check $1500. We were very willing to buy new house and sell our house. We painted our house and it looked very nice. However, realtor came in and talked about the price. The price was very low that we couldn't accept it. We came to the builder and cancelled the contract and asked about our earnest money back. The lot is not progress, everything is just happened only a week, they haven't started doing anything with the lot yet.
The question is if I cancel my earnest money check, what will be happen to me? Will I face any illegal law or be arrested in court law? We are in Houston, Texas.
Thank you very much and we look forward to hearing from your advice soon!


Answer
Dear Steven;

Thank you for your question…

In this market, it is very difficult today to get the price you have in mind. The price usually comes from a price you may have been given or heard about in the past. Because of the ever changing market due in part to the mortgage crisis, todays actual market value is lower than most sellers expect.

Unless it is agreed upon by both you and the builder of your new home, I don’t believe that they can dictate who you will use in the sale of your home. There should be no reason why you could not get a 2nd and a 3rd opinion of value of your home before you make your final decision. You not only should be concerned regarding value, but what the agent will do to get your home sold especially in this market. If you need help in locating an agent either for your situation now or in the future, keep my email address and phone number. Although I am a Realtor in California, I know a large contingent of Realtors throughout the country that will give you the representation you need in this market today.

To answer your question regarding your deposit, I am not familiar with the laws and regulations of Texas, but they should be somewhat similar especially in this situation.

1.   A contract that is written as a contingent offer is just that…contingent on the sale of your home. If you home does not sell within a prescribed period of time, the contract is canceled and the seller is required to return all deposits.  There should be other time related contingencies in the contract, especially with a new home that allows you to review, approve, or disapprove disclosures and other documentation that is provided to you. If for any reason you disapprove, you have the right to cancel the transaction and have your deposit returned.
2.   If you decide that you cannot sell your home for the price the agent is recommending, and therefore you do not sell the home, the contract should be cancelable and your good faith deposit should be returned. I would not hesitate to call the agent to have them review these conditions in your contract. After all they are your representative as well and should be able to advise you of your rights based on the terms and conditions of the contract and no you would not be arrested as no criminal act has been committed.

Steven, I am a practicing Realtor in California and am not familiar with the laws and regulations in the State of Texas. I would highly recommend you seek the advice of the agent representing you in the purchase of the new home you wanted to buy, or seek the advice of legal counsel to determine your position with your deposit. I wish you all the best and don’t forget to contact me if you do need some help in employing a great Realtor to sell your home or just to get a second or third opinion of your home.

Happy Holidays…
John Hendricks
JohnHendricks@Main1.com
415-259-4518

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John Hendricks

Expertise

As a California Realtor for 23 years practicing in Marin and Sonoma Counties, it is now time to provide counsel through AllExperts.com to those who need advise in real estate. My knowledge and experience includes a wide range of resale residential real estate purchases, new home sales, income related investment properties involved in 1031 exchanges, and land. Let me help you in any of these areas...

Experience

John Hendricks has established himself as one of Marin & Sonoma Counties premier Realtors. A native Californian, John is a well-known and respected Realtor in both Marin & Sonoma Counties who has resided in the Northbay since 1976. John began his real estate career in 1986, and since then has distinguished himself as one or Northern California's top producing Realtors. Before joining Frank Howard Allen Realtors, John was an associate of the Prudential California Realty from 1990-1992 where his outstanding sales achievements earned him one of the company's highest honors, the prestigious "President's Circle Membership", presented to the top 2% of associates for sales and earning excellence. Since his association with the highly regarded Frank Howard Allen Realtors in 1992, John has once again established himself as one of his company's Top 10 Producing Realtors in Marin & Sonoma Counties for the years 1993 through 2007 and now in 2008. Five continuous years of outstanding performance has now allowed John to join 15 other Realtors in the prestigious "Lifetime Hall of Fame" for Frank Howard Allen Realtors. John established a group of professional individuals who specialize in a variety of areas in real estate called, 'Lundmark-Hendricks Fine Homes' This group of professionals are dedicated to the success of representing clients with the greatest amount of care and service when either buying or selling real estate.

Organizations
California Association of Realtors National Association of Realtors

Education/Credentials
Upon Request...

Awards and Honors
Frank Howard Allen Realtors "Hall of Fame Member" Chairman's Circle for 10 consecutive years

Past/Present Clients
Joe Louis & Sharon Sigurdson We want to thank you again for your excellent representation of interests during the recent purchase of our home in Petaluma as well as the sell of our home in Mill Valley. We had the unusual pleasure of working with you during the last year both as sellers and buyers. We felt that our interests were always paramount and that we received a very fair price for the sale of the Mill Valley house as well as our purchase of our new home. This speaks particularly well of you, because of the recent unstable and chaotic real estate market. Will Finke "Quite frankly, we came out of a very difficult situation, which time does not allow elaborating on. This was one of the greatest experiences of our lives as clients. John Hendricks is one of the top businessmen I have ever met." Bruce & Nancy Rosentreter "I chose John Hendricks to sell my house. I picked him because I thought he was professional, aggressive, and that he could get top dollar for my house. He fulfilled my expectations completely." Joy Schuelke "Since we were trying to sell a high end home in a very tough market, and in the middle of a very rainy winter, the prospects seemed quite bleak. I was convinced at the time, and am even more so now, that without John's tenure, patience, and tenacity, we would have not been able to move the property." Lynn McCarthy "I cannot stress strongly enough how impressed I was with the service provided to me by John and his group. Throughout the entire transaction, John was always available, always forthcoming with excellent advice based on his years of experience, and always willing to put in the extra effort to make this a positive experience for me. I feel lucky to have had the experience of working with him." Lea Lieurance-Turk "Thank you John for your outstanding real estate services for the past 5 years I have known you. You have made my dreams come true as far as selling and buying property."
http://www.LundmarkHendricksFineHomes.com

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