Pat's Market Wise Q&A from San Jose Mercury News: Sellers Want to Keep Buyer's Large Deposit
Pat Kapowich for SJMN’s Market Wise Column Q: We are canceling a sale with a "For Sale By Owner" seller who refuses to return our fairly large deposit. The adult children of the convalescent parent are claiming the contingency period has elapsed and therefore they are entitled to the deposit. We used a regular real estate contract and the sellers had a real estate attorney draft a counter-offer, which we all signed. We recently consulted a real estate attorney about canceling the sale and he agreed with the sellers. However, since then, our daughter s real estate agent informed us that we should have received certain disclosures which we don t think we did. Today, we received a form from the seller s escrow company that releases the deposit to the sellers. Now what?
A: Don't sign anything until you have consulted a good residential real estate attorney. It sounds like both attorneys you mentioned are geared toward commercial real estate, where legitimately keeping a buyer s deposit can be the norm, not the exception. It sounds like you did not put pen to paper and remove contingencies based on the seller s mandated and contractual disclosures. These For-Sale-By- Owners and their commercially slanted attorney most likely not only missed how to properly address contingencies but also did not follow the contract s time frames and/or disclosure requirements.
It s also safe to say your contract is an outdated copywritten trade association form, which you received from an inactive agent. For-Sale-By-Owners often leave loopholes large enough to drive a buyer s moving truck through. In all fairness, many sellers agents leave loopholes that are big enough for buyers to successfully retrieve their deposit while the seller s moving van is idling outside.
Call your local residential association of Realtors for their preferred list of real estate attorneys. One well-crafted letter citing the mistakes of the sale so far will more than likely result in the prompt return of your deposit. There is only one exception to this common scenario; these sellers won t get to turn around and demand the lost deposit from their listing agency.
Saturday, November 1, 2008
Pat Kapowich, SiliconValleyBroker.com, owns Kapowich Real Estate in Sunnyvale. Send questions to email@example.com.