Are sellers allowed to relist a house when earnest money hasn’t been returned?, by Steven Rivkin.

Are sellers allowed to relist a house when earnest money hasn’t been returned?

By Steven Rivkin

There are instances where an individual sees a home, is attracted to the home, makes an offer, and luckily the seller accepts the offer. Then few days toward closing arises, a dispute between the seller and the buyer, and closing does not occur. Generally, in such scenarios, the seller is supposed to give back earnest money to the buyer and proceed to relist the home.

Earnest money is a percentage of the actual home price that a buyer deposits into the seller’s escrow account to indicate that they are serious about purchasing the home. Otherwise, sellers do not take buyers seriously. Earnest money ranges from 1% to 3%, depending on the real estate market—disputes between the buyer and seller regarding whether a buyer is supposed to get his money back. If a buyer fails to meet the deadline, then the money is not refunded, but if it is not the buyer’s fault, then it is legal for the buyer to be refunded the earnest money.

Whether sellers can relist a home depends on why a contract was not closed. However, it is always advisable to consult an attorney general. For instance, if it was the buyer does not meet the deadline terms and conditions and confirms in writing

that he will not buy a particular property. The seller proceeds to put the home on the market after the cancellation of the offer.

Other instances where a buyer backs out of purchasing a home is if his home is yet to be bought and the buyer does not have enough capital to cater for the closing costs. In the current market, few people afford to own two residential homes even if the other home is completely paid off. For most homes, a 20% down payment is required before the closing. Buyers are thus encouraged to have a plan B if the first plan fails. There are also instances where a buyer has emerging cost that must be met with immediate effects, such as an accident or natural disaster. During such instances, the buyer is advised to pull out from purchasing within the time frame and cancel an offer in writing. If the deadline is already reached, then there is a chance that the buyer will not get back the earnest money. The offer will be canceled, and the seller will proceed to relist the property. when relisting a property if the buyer still insists on buying the home. Buyers are sometimes denied loans, but if they communicate with the seller and inform them they have found another mortgage lender, the seller shouldn’t relist the property. The seller might find himself in trouble after an offer on a house whereby previous offers were not canceled. Both buyers might sue the seller, and clearing off the mess is expensive for the seller.

There are also instances where a seller does not meet the deadline of closing. Suppose the contract indicated that he should make repairs and has not met them, then the buyer has a right to get earnest money back. In that case, the seller can be sued for breach of contract, relisting the home, not paying back earnest money, and consequently, face adverse judgment.

Sellers should note that it is the right of a buyer to get their money back if they notice some problems during an inspection that lead them to back out of the purchase process. So long as the buyer informs the seller about his intention timely, he receives the money back, but if a buyer reports to the seller after the deadline is met, the seller keeps the earnest money and has a right to do so. After giving back the money, a seller proceeds to put the property back on the market.

However, it is worth noting that a seller can only relist a property after both parties cancel an offer. Otherwise, the seller faces harsh judgment if the matter is taken to court. If the buyer is yet to receive earnest money after one month, and it was his right, then the buyer has the right to take action. First, the buyer is advised to report the matter to the company or broker responsible for marketing the home to stop the process and solve the disputes.

Other methods buyers use to resolve disputes over earnest money is by talking to real estate agents who helped them or involving an attorney at a cost. So that they file a cancelation offer after that, consult the broker holding the escrow account with the money for it to be sent back to the buyer. The process work even in the absence of the seller.