Refund of earnest money deposit (sale, real estate, credit score)

[RanchoConsult]

Our financing was approved, all other contingencies met, but due to processing delays by the bank on the day escrow was to close, the loan was not funded that day. The loan contingency in the contract stipulated it remained in affect until the loan was funded. Sellers' agent immediately had escrow issue a cancellation of escrow with earnest money to be released to the the Sellers. As buyers, we complied with all the terms of the purchase agreement. Seller's agent states Buyer's defaulted on the contract and therefore the sellers are entitled to the earnest money deposit. Is this agent correct?

[bouncethelight]

I would post this in the real estate section here on City-Data, and specify that it's in California - there are some real estate pros that hang out in that section.

What a sad situation. Losing a house due to bank processing delays is a really sad thing...

[RanchoConsult]

Thank you for the suggestion. I posted a thread in the real estate section noting it is in Southern California.

[bhcompy]

Ah, earnest money, another real estate scam that hurts honest people more than crooks

[nmnita]

Originally Posted by bhcompy

Ah, earnest money, another real estate scam that hurts honest people more than crooks

bull, an earnest money deposit has always been part of the real estate deal. How would you feel as a seller if someone agrees to purchase your home and then a few days prior to the close of escrow says, sorry, changed my mind. In the meanwhile your house has been off the market for weeks or months? Don't you think you have a right to something?

Nita

[nmnita]

Originally Posted by RanchoConsult

Our financing was approved, all other contingencies met, but due to processing delays by the bank on the day escrow was to close, the loan was not funded that day. The loan contingency in the contract stipulated it remained in affect until the loan was funded. Sellers' agent immediately had escrow issue a cancellation of escrow with earnest money to be released to the the Sellers. As buyers, we complied with all the terms of the purchase agreement. Seller's agent states Buyer's defaulted on the contract and therefore the sellers are entitled to the earnest money deposit. Is this agent correct?

Why did the agent stop escrow? So it was off a few days, this happens all the time. Who is right, I really can't say, but the sellers agent should explain why she/he did that>..There seems to be something missing in this story.

Nita

[RanchoConsult]

Nita, The listing realtor who stopped the escrow had the full loan authorization letter, had spoken with the VP of B of A (per her e-mail to me) who assured her the loan was going to be funded and still she cancelled the escrow rather than requesting a one day extension of escrow. As buyers we have an excellent credit score and had already transfered the 20% cash down payment to the escrow account. This realtor chose a punitive action rather than an action which would allow the loan to be funded and the trust deed to be recorded. So, you think we as buyers who complied with all the terms of the contract should be punished by this supposed real estate professional?

[bouncethelight]

Originally Posted by RanchoConsult

This realtor chose a punitive action rather than an action which would allow the loan to be funded and the trust deed to be recorded. So, you think we as buyers who complied with all the terms of the contract should be punished by this supposed real estate professional?

I don't know... from what you've written, it sounds like the seller may have wanted to get out of the deal, and grabbed the opportunity to do so.

I just can't see anyone taking a "punitive action" and stopping the sale of a house, over a one day delay? As Nita mentioned, it seems like there may be more to the story - not on your end - but on the sellers end. If they wanted out of the deal, the delay gave them legal opportunity to get out.