Expert: Dick Dennis - 8/10/2006

Question
My husband and I had a buyer make an offer on our home just recently which we accepted on July 10th.  They asked for settlement date of August 2nd which we agreed to.  We signed the contract and they gave our realtor a $1000 deposit (personal check - not certified funds).  They called back and asked for us to push settlement up to July 25th.  Which we agreed to.  We moved out of the house and put a contract on another home we were purchasing.  The day of settlement on the home we were selling I had a home inspection to go to for the home we were buying.  Right before leaving for settlement which was scheduled for the 25th at 4:00pm, I received a call from my realtor saying that the mortgage company wasn't ready.  The mortgage commitment date was July 25th - the day of settlement.  Apparently, the buyers were expecting a $30k gift from a family member that didn't pan out.  So, there mortgage fell through.
We did not get to keep their deposit - which we didn't have in certified funds anyway, we moved out of our house, we have a contract on a house that we may or may not get and have paid $500 toward for home inspections.
How is this fair?
Should we have been entitled to the deposit?  I know the contract was contingent upon their financing going through...but we had a commitment from the mortgage company? I just don't understand how this is all possible.  Do you see where we have any recourse?

Answer
You've just learned one of life's lessons, Karen. Anytime the other party asks for something, require something in return! The buyers had asked for a closing sooner, fine, then they should come up with an increase in the earnest money deposit (non-refundable.)

Never, never buy another house without having a contingency in your purchase agreement as follows, "This purchase is subject to the successful sale and closing of the buyer's property at 123 Main St., Anywhere, Illinois."

Conversely, if you were selling a property, you say, "This sale is subject to the closing and availability of the seller's purchase, located at 789 Jones St., Anywhere, Florida." This way you never get caught in limbo.

Yes, I know you were anxious to move into a new house, but that is what costs you money. Now it has cost you inspection fees, etc. As for the buyer's deposit, yes, the buyer's purchase is always subject to the successful financing. Since they could not perform to satisfy the lender, there was no loan. Ergo, no sale of your house.

Chances are very good that had you had a professinal Realtor representing you in the sale of your property, all this would never have happened. A good Realtor just doesn't allow this kind of tripe to happen. Any deposit becomes non-refundable X-amount of days after acceptance, especially when the buyer asks to a push-up in the closing date.

I do wish you well.

Dick Dennis                 dixiedee13@aol.com