Legal Question in Real Estate Law in Pennsylvania
Deposit money collection
My fiance recently had a completed sales agreement for his house. The buyer deposited $5,000 in an escrow account held by the buyer's agent. Buyer then completed a home inspection. Closing was set for one week from the day that buyer announced that she did not want to go through with the sale. It appears that she just got cold feet. What are seller's options for collecting/keeping the hand money? Shouldn't the full amount simply be paid to seller without the need for legal action?
1 Answer from Attorneys
Re: Deposit money collection
What's in the agreement about the buyer's right to cancel? What did the agreement specify about the buyer's home inspection and buyer's rights after the home inspection?
The listing agreement with your Realtor and the agreement of sale with the buyer should each have provisions that control what happens to the buyer's deposit money.
However, you should be aware that Realtor's are not permitted to just hand over the deposit money to either party. Realtors need a signed release document from both parties, agreeing that the sales agreement is terminated and who should get the deposit, and that the buyer and seller each release the other and the Realtor. Only after that release is signed by everyone can the Realtor release the money.
If one of the buyer or seller is unwilling to sign a release, it will be necessary to go to court for a determination of who is entitled to the deposit. If that becomes necessary, you should consult a local real estate lawyer.
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