Legal Question in Real Estate Law in Connecticut

Re: initial contractsa for the purchase of a house

Hello,

It sounds like you are frustrated because you want your deposit returned, but the seller will not return it.

You will have to read your contract to see the specific situations under which your deposit is refundable. Typically, a deposit is nonrefundable unless one of the following occurs:

1. Mortgage contingency: on or before the mortgage contingency date in your contract, you notify the seller that you are unable to secure funding for the purchase. This date is usually significantly before the closing date, so look at your contract for this date. If this date has passed, you can't get your deposit back.

2. Inspection contingency: If you put this clause into your contract, you can get a return of your deposit if you pulled out because the home inspection revealed significant problems. Again, look to the terms of your contract to see exactly how the home inspection affects your contract.

Other than that, the seller usually does not have to return your deposit. This is frustrating for purchasers who pull out of their deals and expect their money back, but think about it from the seller's perspective: The seller took the property off the market, possibly even rejected other offers, and lost the opportunity to get offers on this property while it was under contract with you. Additionally, the seller probably had to make mortgage payments and maybe tax and insurance payments while it was under contract. The deposit is there to ensure your faithful performance and to offer some compensation to the seller in the event that the deal falls through.

In summary, you will need to read through your contract very carefully to see what your agreement was with the seller regarding your deposit.

Diana