Legal Question in Real Estate Law in Illinois
Sold house with an as is contract. Buyers paying cash. Under the 5 day attorney review, they did NOT get an inspection or request an extention. Now, 20 days later and 2 weeks before closing they want an inspection. We denied it and were told by their agent they would most likely be backing out of the deal.
That is fine, we feel at this stage of the game they are just trying to find ammunition to try and legally back out of this. The contract further stated that paragraph 10 pertaining to time length of inspections is null and void under an "as is" contract. We of course are not going to try and legally make them purchase the house.
My question is this, what happens to their 5k earnest money? Are we entitled to any of it? If we don't release their money back to them, can they file something against us so that we cannot put the house back on the market and sell it.
So fed up and confused! Thank you in advance.
2 Answers from Attorneys
Based on your description, my opinion is that they would be in default and that the earnest money would be forfeit to you and/or your agent. You should have an attorney review the contract and all the communications to get a reliable legal opinion. If disputed, it may be to your advantage to concede a partial refund and simply move on. I also recommend an experienced real estate closing attorney be involved throughout the transaction.
I agree with Mr. Repay. And the contract has to be reviewed because the language may give something to the broker or the broker may be required, if the buyers dispute the forfeiture, to deposit the money in court and require the parties to litigate how the earnest money is to be handled (called an "interpleader"). So another "maybe" way of dealing with this and avoiding that kind of result, may be to allow an inspection but deny any right to terminate regardless of results. BUT again I would NOT do this without having an experienced real estate attorney involved who has fully assessed the situation first.
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