From the clients we have had come to us during the times we were “on deck”, we see that this “scare tactic” is still in full swing.
The Deposit: It is an offering of money that gets applied to escrow. This offering is a monetary sum, usually offered by a Regular Personal Check, it was 3% of the offering price – back in the day. Today most offers on residential real estate, owner occupied, allow deposits ranging from 3K to 10K.
The Deposit does not become actual money until Escrow is opened. If you are purchasing real estate and you are having offers written by your Realtor, most likely they are making a copy of your deposit check and you are retaining the “true instrument”. When your offer is accepted, then you will surrender the “real check ” which you previously retained, or write a new one made out to the Escrow Company the seller (owner), is choosing.
There is the Passive Way and the Active Way – Within most real estate dealings there is a time when the Seller(owner) will ask the buyer to remove all contingencies(all enforcable reasons why you as a buyer will not want to purchase the seller’s “for sale” property any longer)– if that document(removal of contingencies) is signed and they(the buyers) decide not to purchase the seller’s home – there could be trouble with the buyers deposit.
There is not a “black and white” way to answer this – because if someone decided to keep your deposit as a buyer, you have other options. While you are not agreeing to, and determining which of those “other options” are best for you to invoke – the Seller is unable to sell their property.
The other side of the coin reveals that during the time while there is potential litigation from the seller not willing to release the deposit back to the buyer – the buyer cannot purchase anything else either (depending on whether or not the buyer has additional money to make another deposit and other contractual obligations).
The Stalemate 🙁
Buyers Deciding not to buy and Sellers not being able to sell – usually comes down to the Agent representing each respective side not being informative enough. Ask a lot of questions – Get what those you are choosing to represent you, are telling you, in writing.
As a sellerask your agent about keeping the buyers deposit.
As a buyer ask about being able to back out and retain the money that you deposited.
Ask these questions to the real estate professional you are choosing and remember – “We are here to help when you are ready…”