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  1. #1
    Join Date
    Mar 2019
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    6

    Exclamation How to Get Earnest Funds Returned After Backing Out of Sale Due to Property Issues

    My question involves real estate located in the State of: Pennsylvania / zip 19018

    Reasons for backing out were many. Knob and tube electrical wiring, could not get the property insured; rotten beam foundation; a whole lot of renovation was needed, but I was still interested in purchasing it.

    The main reason I could not go through with it is related to a shed that was illegally built (per L&I) right against the deck of the property for sale by a neighbor to house multiple dogs. The township as well as the health department are in litigation with this neighbor. This info was not disclosed by the sellers, I found out about it from a township inspector.

    I still wanted to proceed with the purchase, but felt that I was getting my family in the middle of a crossfire. This is a health and safety issue. The sellers are now refusing to release my earnest funds of $3,000.00 and are even threatening legal action. All suggestions/ideas are welcome.

    Many thank in advance for the help!

  2. #2
    Join Date
    Oct 2006
    Posts
    15,123

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    You likely want to give up on that property, and you will likely have to sue them for the return of the earnest money.

  3. #3
    Join Date
    Mar 2019
    Posts
    6

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    I thought non disclosure and major inspection flaws are a vital reason for that issue ?

  4. #4
    Join Date
    Mar 2013
    Posts
    16,671

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    Quote Quoting Andree
    View Post
    I thought non disclosure and major inspection flaws are a vital reason for that issue ?
    If you only "thought" that instead of "knew" that then you might not have read your purchase contract very carefully.

    You may have valid reasons for backing out and the sellers may have valid reasons to disagree.

    At this point the only way you will get your money back is to sue for it.

    $3000 is well within the PA small claims limit.

    I suggest starting with a demand letter: release your money or you will file a lawsuit and a record a "lis pendens" (google it) against the property. Attach copies of both (but not filed).

    If that doesn't get you your money quickly, go ahead and file suit.

  5. #5
    Join Date
    Mar 2019
    Posts
    6

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    Thanks so much for that information, just trying to look for a sample letter but so far only found court related documents, if you don't mind eventually could you send me a link to the right letter, I really appreciate your time and effort to help me out.

    Thanks

  6. #6
    Join Date
    Oct 2016
    Posts
    2,670

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    If you Google for "sample demand letter" you will find many.

  7. #7
    Join Date
    Mar 2019
    Posts
    6

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    thanks so much for your help

  8. #8
    Join Date
    Mar 2013
    Posts
    16,671

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    Quote Quoting Andree
    View Post
    Thanks so much for that information, just trying to look for a sample letter but so far only found court related documents, if you don't mind eventually could you send me a link to the right letter, I really appreciate your time and effort to help me out.

    Thanks
    Shouldn't be too hard to create.

    Start by quoting the terms of the contract that allows you to cancel the purchase based on what you found during the inspection. Then list what you found that you object to. The rest is about as simple as I posted in my last comment.

    You can get your small claims form off your court website and google for a sample "lis pendens."

  9. #9
    Join Date
    Mar 2019
    Posts
    6

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    thanks so much , yes I found it already , one more "Q" can I send just send a letter registered or do I have to file with the court ?? means I need the formal complaint form from them ??

  10. #10
    Join Date
    Mar 2013
    Posts
    16,671

    Default Re: How Do I Get My Earnest Funds Returned After I Backed Out of Settlement Due to Is

    You can just send the letter. You don't have to file the letter with the court.

    The strategy of attaching a completed (but not filed) small claims complaint form is that you show that you mean business.

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