Legal Question in Real Estate Law in Massachusetts
purchase and sale deposit
We had an offer in on a house. we put $500.00 down to bind the offer and an additional $2000.00 down upon execution of the purchase and sale aggreement. When our agent brought us the purchase and sale aggreement we had just found that the financing we were recieving was not what we were told or expecting so we pulled out of the deal. It's my understanding that since we didn't sign the purchase and sale aggreement that we get the $2000.00 back but forfeit the $500.00. Is this correct?
3 Answers from Attorneys
Re: purchase and sale deposit
The offer should have a provision in it that says the money is returned to you if you do not execute the P&S. without seeing what you signed it is difficult to advise. However, you should get at least the $2,000.00 back.
You could have changed the P&S to reflect your financing requirements to see if the Seller would have accepted it.
There is case law however that provides a different outcome depending upon the Seller and their attorney's attitude. Neevertheless you should get the $2,000 back.
Re: purchase and sale deposit
The $2,000 additional deposit is not refundable unless there was a contingency in the Purchase & Sale Agreement which would allow for you to back out of the deal if you did not find acceptable financing. In order to determine whether you are entitled to the deposit look at the section of the Purchase and Sale Agreement that deals with financing. The language of this section will indicate whether you were justified in pulling out of the deal. If you were justified, then you would be entitled to your deposit.
If I may be of further assistance, please do not hesitate to contact me.
Will Thompson
MELTZER LAW OFFICES
Re: purchase and sale deposit
Unless you have a written agreement with the real estate agent that they represent you as a BUYER's agent, most real estate agents represent the seller as their commission is paid by the seller.
Therefore retain an attorney to review the Offer form you presumably signed, which controls whether you are entitled to return of your $500 earnest money deposit, and perhaps also whether you are entitled to the return of the $2,000 deposit which should not have even been tendered if you didn't sign the P&S (a copy of which your attorney will also need to review). Be advised there is case law that has held that a written "offer to purchase" once accepted by a seller may constitute a binding contract even if a P&S is not signed, if the written offer has sufficient terms to make it binding. Good Luck!
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
