Release of earnest money from buyer defaults

Seller's Remedies When Buyer Defaults - Realty Times

Whether the Buyer or Seller is entitled to receive the earnest money depends on the timing and reason for termination and the specific language of the Contract, itself. Upon termination of this contract, either party or the escrow agent may send a release of earnest money to each party and the parties shall execute counterparts of the release and deliver same to the escrow agent.

If either party fails to execute the release, either party may make a written demand to the escrow agent for the earnest money. If only one party makes written demand for the earnest money, escrow agent shall promptly provide a copy of the demand to the other party.

If escrow agent does not receive written objection to the demand from the other party within 15 days, escrow agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors.

If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money.

Under most circumstances with notable exceptions , termination by a Buyer following expiration of these deadlines results in a forfeiture of the earnest money.

During an inspection period, a Buyer can terminate for ANY reason and still receive a refund of the earnest money.

Can a Buyer on a Real Estate Contract May be Held Liable Beyond His Earnest Money Deposit? - qyzofolawory.web.fc2.com Hosted by Attorney William Bronchick

However, following the end of this period, the Buyer has limited opportunity to terminate and still receive a refund of earnest money. A Seller can generally terminate a Contract only when the Buyer has failed to comply with the Contract a Buyer default , including by failing to timely tender earnest money to the escrow officer.

Where the Buyer has defaulted, the Seller is entitled to receive the earnest money. Failure or refusal of a Buyer or Seller to release the earnest money in the face of a clear contractual obligation to do so can result in severe consequences.

Parties to a failed real estate contract that results in an earnest money dispute are wise to secure the services of an experienced real estate attorney. Olmos Drive San Antonio, Texas Posted on March 7, by Trey Wilson -- San Antonio Real Estate Attorney.