CASE STUDY: My fiance & I live in Las Vegas NV. We were planning to use his VA benefits to obtain a VA-guaranteed loan. However, during the underwriting process he got laid off. This occured during our 10-day "due diligence period." I immediately applied for, and was pre-qualified for a VA-guranteed loan with the same lender . At that point, we submitted a new contract on the same house, in my name, honoring the same timelines in my fiance's contract. While my loan was in underwriting , my due diligence expired. Four days after the due diligence expired, I was denied the loan. Meanwhile, my fiance secured a new job in the same line of work and the lender issued a new pre-qual letter. Our real estate agent had the listing agent to ask the seller if he would be willing to let us place yet another offer on the property using my fiance again. The seller said he would reject the offer. He also indicated he had no intention of refunding the earnest money on my existing purchase agreement, even though he received a copy of my lender's loan denial. OPINION: First of all, I am not a lawyer and I can't give you legal advice! This is for general information purposes only! Only a judge can determine who is entitled to your earnest money deposit based upon the facts of your case. However, look at your purchase agreement! Did you and the seller agree to go to mediation at your local Realtor association in the event of a dispute on the contract? If you used the Greater Las Vegas Association of Realtor's Residential Purchase Agreement, you'll find that clause in Paragraph 17. You mentioned you were past your "due diligence period." The "due diligence period" is a separate time frame for certain things to be accomplished (See: GLVAR RPA Paragraph 12). If the subject property is in a Common Interest Community (CICA, aka HOA), you have another separate time frame running co-temperaneously (See: GLVAR RPA Paragraph 8). Just because you may have been past the timeframes in those paragraphs (or others) doesn't mean other contingencies and timeframes are no longer in effect! Having not read your contract, was your offer contingent upon obtaining financing, a standard clause in most contracts? If so, were there any specific timeframe outlined in your agreement? If so, did you at any time waive the financing contingency? Do you know the specific reason why the seller won't release your earnest money deposit other than his frustation? Most states have laws governing money held in escrow, and the duty of a party to a real estate transaction to executve documents to release the monies held, except for a "good faith" reason. In Nevada, we look to NRS 645A.175 - You'll find information on my blog. RECOMMENDATION: Contact your agent and broker and tell them to prepare a rescission (cancellation) that includes a clause that instructs the escrow holder to release the total amount of your earnest money to you. Then, tender that rescission and instruction to the seller. In other words, you must make a written demand for your earnest money. If the seller refuses, find out the applicable law that applies in the state where the escrow is held. If outside Nevada, ask the escrow holder's attorney the applicable law, cite the sosurce, and send a copy of it to the seller and their broker. You can also file complaints with the real estate division and with the local association of Realtors against the agents and brokers in this matter, if you feel they haven't done the right thing. And, once again, you can apply for mediation at the Association if that provision was agreed to in your contract. If not, there's always small claim court. Best of Luck!
This entry hasn't been re-blogged:
Re-Blogged By Re-Blogged At
Find what you need?
See More Blog PostsAbout Real Estate! SEE MORE NOW!