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I signed a P&S Agreement and it said it had a non refundable earnest money deposit. In what circumstances could I get it back? It was for $5,000. I signed it because I'm very serious about the house but now that I've been thinking about the worst scenario that could happen. This is a for sale by owner property so there is no real estate agent involved.
Also their is a fourth page, but its just all the signatures, but at the top I put that contract is subject to appraisal.
Attached is a copy of the agreement.
Tell me in what scenarios that I would be able to recover my deposit
Subject to appraisal means you can back out of the contract. It does not mean you get your earnest money back.
In a normal contract , written by an agent, or checked over by your lawyer, the earnest money would probably be refundable if there is an appraisal contingency. However, that contract would not say that the earnest money is non-refundable.
Did the property come in with a low appraisal? Perhaps you can renegotiate the price. That depends upon how badly the seller wants to get it sold.
You made a bad mistake. Sometimes mistakes are costly. At least take the opportunity to learn from it.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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I agree, the seller has been clever enough to ensure that if you back out they can make a few more months payments on you while continuing to try and sell it. Especially without a realtor it's good to have a lawyer study any contract before signing it. If it doesn't appraise,
you will either lose the $5,000 or have to come up with a bigger down payment. Normally you could negotiate a lower price but with your $5,000 in hand they can lower it for the next buyer by that amount without any loss.
It was for $5,000.
This is a for sale by owner property so there is no real estate agent involved.
If you don't already have an attorney now would be a good time to remedy that.
Don't try any other RE purchases (especially FSBO) without a lawyer.
Depending on about twenty different permutations you might possibly get some refund.
The odds of getting your money back in full are somewhere between slim and none.
I signed a P&S Agreement and it said it had a non refundable earnest money deposit. In what circumstances could I get it back? It was for $5,000. I signed it because I'm very serious about the house but now that I've been thinking about the worst scenario that could happen. This is a for sale by owner property so there is no real estate agent involved.
Also their is a fourth page, but its just all the signatures, but at the top I put that contract is subject to appraisal.
Attached is a copy of the agreement.
Tell me in what scenarios that I would be able to recover my deposit
I signed a P&S Agreement and it said it had a non refundable earnest money deposit. In what circumstances could I get it back? It was for $5,000.
According to your contract, there are several scenarios under which you could possibly get your earnest money deposit back. The more unlikely ones include:
1) If there are Title issues which cannot be resolved by the Seller; or
2) If the house is damaged or destroyed prior to closing.
Other possibilities include:
3) Building Inspection. Paragraph 12 indicates that you may get the building inspected. If issues are discovered which are not satisfactory, you have 30 days from the date of the contract to notify the Seller that you wish to rescind the contract or to resolve the issues.
4) Financing. Although, in Paragraph 14, you didn't check that the contract was contingent on financing, subsequent language was included which seems to indicate that was the intent. Curiously, it was written that you're only seeking a loan for 20% of the purchase price. I suspect that % was written in error.
Line 14c indicates that you are (or were) to deliver a loan commitment letter to the Seller within 5 days of the date of the contract. You need to pay attention to the details of your contract to make sure that you do not default on the terms. Consulting with a qualified real estate attorney should give you the peace of mind that you seem to need to get through the closing. Mind you, I am not an attorney (and no advice on CD can be construed as legal advice), but your contract seemed generous in ways you could get your deposit back, not the other way around.
Don't get too worried about theoretical "worst case" scenarios. Get an attorney to handle your closing and do your best to meet the contract terms. As long as you do, your closing--more than likely--should go fine.
Typically non-refundable means that it isn't subject to a return to the buyer based on contingencies. The seller keeps it no matter what. You really need an attorney to read over your contract and see what you agreed to.
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