Legal Question in Real Estate Law in Virginia
Release of earnest depoist
I (FSBO) have a ratified contract (Regional Sales Contract) with no contingencies from a buyer (represented by his agent) wanting to purchase my townhouse. The contract was ratified on 11/13 and the property was to close on the 12/13 - however after several attempts to reach the purchaser's agent, on the 12/11, I was informed that the purchaser's lender revoked their preapproval of the loan.
The deposit of $5000 is held by the escrow agent. In paragraph 7A, The purchaser will OBTAIN a Conventional...amoritized over 30... Special Terms: ''Purchaser reserves the right to alter financing as long as it does not effect the seller or closing.'' Paragraph 8A states seller will pay $''-0-'' toward the Purchaser's charges. Paragraph 9B states This contract is contingent until 9p.m. ''-0-'' Days after Date of Ratification...
The purchaser is not refusing to sign the release, dispersing the earnest monies to me (the seller), based on their lender changing the criteria for a loan program they were approved for.
Do I have a case to sue for the $5000 deposit, and could I add damages based on the property being held for almost 60 days as a result of him refusing to sign the release? Also, is is legal to sell the house w/ suit pending?
1 Answer from Attorneys
Re: Release of earnest depoist
It all depends on the terms of the contract. It sounds like you may have a claim to the deposit. If the contract is terminated, you can re-sell the property, and if you get less, you can sue the first buyer for damages UNLESS your contract limits his liability to the deposit. But you have to use reasonable efforts to maximize the sale price, which may mean NOT doing it FSBO. You should have a lawyer review the contract and the facts immediately, before doing anything.
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