Legal Question in Real Estate Law in California
Can a seller get compensated with the GOOD FAITH DEPOSIT when a buyer backs of t
We accepted an offer for our home because the buyer was prequalified with a loan letter and put down a $5000 good faith deposit...he told us to stop all upgrades to the house because he was coming in to fix the place the way he liked, so we did that....in the meantime almost 3 weeks went by, we passed all inspections with minor repair recomendations...this guy decides to back out of the deal and now here we are 3 weeks into this sale and didn't do any of the upgrades we wanted to do and now we have to start ALL OVER! SHOULDN'T WE BE ENTITLED TO THE GOOD FAITH DEPOSIT AS COMPENSATION FOR OUR TIME AND THE LOSS OF ANOTHER POTENTIAL SALE! I'm very upset and am wondering what's the ''POINT'' of a ''good faith deposit'' if it really doesn't mean anything for the seller???? when ever i have put a deposit down of something to hold it meant that i would come back with the rest of the money to pick up the item whether it be a car or garage sale item, if i chose to cancel the deal i would be out the money and the seller would be compensated for his holding time and loss of a potential sale other than mine??? IS A GOOD FAITH DEPOSIT JUST A CROCK? PLEASE LET ME KNOW.....Thanks, Natalie
2 Answers from Attorneys
Re: Can a seller get compensated with the GOOD FAITH DEPOSIT when a buyer backs
i would have to see your contract but there is a cluse that if he backs out you can keep the deposit up to 3% of the transaction gross price as liquidated damages --- both parties have to initial this clause --- did you have a real estate agent -- if you need help I have been practicing law in the San Francisco Bay area for approximately 35 years and expert in the area in the category in which your question is placed. I feel I can help you in this matter and if you wish to consult with me please contact me at 925-945- 6000.
Re: Can a seller get compensated with the GOOD FAITH DEPOSIT when a buyer backs
Depending on the terms of the contract, you may or may not have a right to keep the deposit. If it is a standard CAR contract, the terms call for a buyer to remove contingencies in writing. Have they done so? If not, they may have the right to back out, even if your property "passed inspections". Someone would need to review the contract to determine your rights.
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