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  1. #1
    Join Date
    Jan 2019
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    Default Earnest Money Release from Seller in Florida

    My question involves real estate located in the State of: Florida

    I made an offer on a house and deposited $10K as earnest money with the title company.
    The offer was submitted via a standard Florida Realtors "AS IS Residential Contract for Sale and Purchase".

    https://myfloridaquest.com/wp-conten...-Rev-04_17.pdf

    Box Section 8(b) was selected stating: "This Contract is contingent upon Buyer obtaining approval of a conventional loan within 30 days after Effective Date.

    Financing was not obtained at the end. The sale fell through as I would not accept the final terms offered on the loan on the day of closing. Seller requested an explanation and I stated that the interest rate offered at the end was substantially higher then in the initial loan offer during the pre-approval process and therefore not acceptable. The sale was was extended 3 times due to delays in roof repairs so there was a time period of about 5 months between the acceptance of the offer and the final sale date.

    Title company will not release earnest deposit unless seller signs a Release and Cancellation of contract.
    Seller has not signed and it has been 5 weeks since my agent submitted the form to the sellers agent. Seller's agent stated she has not been able to reach seller and neither have my own attempts. I do know he is around since when I called his work number the receptionist stated each time that he was in the office but not available.

    Under section 16(b) of the contract, Dispute Resolution, it states buyer and seller are to settle disputes through court-appointed mediators. But it also states that injunctive relieve may be sought without complying with 16(b).

    Under 17 it states that each party is responsible for their own attorney's fees and that the mediation cost will be split equally between the parties.

    Questions:

    1. How much longer should I wait before filing an injunction or going to mediation? (depending on point 2 below)
    1. Do I need to file an injunction before going to a mediator? Or can I just engage a certified mediator with real estate experience without having it court appointed?
    2. What are the reasons seller could argue for not returning the earnest deposit?

  2. #2
    Join Date
    Mar 2013
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    16,792

    Default Re: Earnest Money Release from Seller in Florida

    Box Section 8(b) was selected stating: "This Contract is contingent upon Buyer obtaining approval of a conventional loan within 30 days after Effective Date.
    Let's discuss that a little further.

    I found a sample contract on line.

    https://www.floridarealtors.org/Lega...atermarked.pdf

    8(b) in full reads:

    (b) This Contract is contingent upon Buyer obtaining approval of a conventional FHA VA or other______________ (describe) loan within _______ (if left blank, then 30) days after Effective Date (“Loan Approval Period”) for (CHECK ONE): fixed, adjustable, fixed or adjustable rate in the Loan Amount..., at an initial interest rate not to exceed _______ % (if left blank, then prevailing rate based upon Buyer’s creditworthiness), and for a term of_______(if left blank, then 30) years ("Financing").
    (Emphasis mine.)

    Look at your contract and say whether you inserted an interest rate limit in the blank provided.

  3. #3
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    Jan 2019
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    6

    Default Re: Earnest Money Release from Seller in Florida

    We did not.

  4. #4
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    Mar 2013
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    16,792

    Default Re: Earnest Money Release from Seller in Florida

    Then you are in breach of contract. Refusing the loan is not the same as being denied the loan.

    Now look at Paragraph 15. Default:

    BUYER DEFAULT: If Buyer fails, neglects or refuses to perform Buyer’s obligations under this Contract,
    including payment of the Deposit, within the time(s) specified, Seller may elect to recover and retain the Deposit
    for the account of Seller as agreed upon liquidated damages, consideration for execution of this Contract, and
    in full settlement of any claims, whereupon Buyer and Seller shall be relieved from all further obligations under
    this Contract, or Seller, at Seller’s option, may, pursuant to Paragraph 16, 329 proceed in equity to enforce Seller’s
    rights under this Contract.
    That means that the seller can either keep your $10,000 as liquidated damages or sue you for specific performance and make you buy the property regardless of the interest rate on the loan.

    I don't see you having much hope of getting your $10,000 back but for that kind of money I suggest you consult an attorney and review your options.

  5. #5
    Join Date
    Jan 2019
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    6

    Default Re: Earnest Money Release from Seller in Florida

    I believe you are concluding that obtaining a loan is an obligation of the buyer. Therefore, if the buyer fails, neglects or refuses to obtain a loan that the buyer is in breach of contract.
    Can you point out in the contract where it states that obtaining finance/a loan is an obligation of the buyer?

  6. #6
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    Default Re: Earnest Money Release from Seller in Florida

    Quote Quoting Blitz
    View Post

    Can you point out in the contract where it states that obtaining finance/a loan is an obligation of the buyer?
    It's in 8(b). You quoted it yourself at the beginning of the thread. Read that whole section and note how may times the word "Buyer" is used in connection with the financing contingency.

  7. #7
    Join Date
    Jan 2006
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    38,438

    Default Re: Earnest Money Release from Seller in Florida

    Quote Quoting Blitz
    View Post
    I believe you are concluding that obtaining a loan is an obligation of the buyer. Therefore, if the buyer fails, neglects or refuses to obtain a loan that the buyer is in breach of contract.
    Can you point out in the contract where it states that obtaining finance/a loan is an obligation of the buyer?

    Obtaining approval for a loan was a contingency. If you were not able to obtain the loan with the terms mentioned or better you could have been released from the contract. Since it’s obvious you were approved for a loan and it appears to meet the requirements in the contingency clause, the contract is no longer contingent upon you obtaining approval for the loan. That means the contract is now locked and enforceable by either party. You chose to breach the contract. That means you lose your earnest money.

    The issue of you not attempting to obtain a loan brings in another issue altogether. Since it doesn’t apply there is no need to address it.

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