Are we entitled to our earnest money?

Question

My husband and I decided to buy a house, and signed a purchase agreement, putting $500 down as earnest money. Everything went good, an appraiser was supposed to be there today to look at the house. However, last week a wind storm ripped through our town with 100 mph winds and tore the shingles and everything off the house, leaving plywood exposed to 2 inches of rain. We had already paid an inspector $300 to inspect the home. We cancelled our purchase agreement and decided not to buy the house based on the damage that was sustained, and the possible damage the rain would have caused with the house exposed. I took pictures of houses next to it that would have endured the exact same wind, and there was ZERO damage done to any of them. They are refusing to return our earnest money, and I think we are entitled to it. The house is not in the same condition as it was when we signed the purchase agreement, and we have no idea how much damage the exposure to the rain caused. Is the sheetrock wet? Are the walls going to be moldy because of the moisture? I've decided that I will take them to court if they refuse to return our money...but will a court see it the same way that we do? Are we entitled to our earnest money?

Answer 1

What does your Buyers' Agent say?

Answer 2

sorry but their insurance company should cover any damages to the home and make it right.

Answer 3

If you signed a purchase agreement, and then upon inspection there were issues with the property that were not stated in your original transfer disclosure statement that were found later, then you have the right to recind on the agreement and receive your deposit money back.  If the seller agrees to pay for the damages and you accept, then the contract is still valid.  Contact a Real Estate attorney for more advise.

Answer 4

Nope, you are not, because it was a violation of your purchase agreement to not give the sellers a change to repair the damage.

I seriously doubt if the sellers agreed to a blind inspection...that means that you can cancel the contract over a lose s***w if it was on the inspection report.

No listing agent would advise that..

The don't have to release your earnest money...ever.  You'll have to sue to get it back..but they don't get it either. It just sits in a trust account until one of you signs it over or another agreement is reached.

If you go to court, I can already tell you that you'll lose.

If you want to know how far it goes...even if the SELLER DIES, the deal goes through if he signed the contract prior to him dying...if the house BURNS DOWN and the sellers can rebuild, it still obligates you.

You do have the right to a proper repair...don't get ridiculous about it...when EVERY house is built, most of the time the interior is exposed to a full rainstorm.  You have the right to have the moisture tested and the property re-inspected (and if you use the same inspector, he should not charge you more than $100 for the return trip....and no, the sellers don't have to pay that).

Drywall does NOT have to be replaced if it was never wet.

Answer 5

Do you have the "subject to inspection" clause in your contract? This allow you to withdraw the contract if you don't satisfy with the inspection. After the incident, the seller should disclose ALL damages (inside and outside) to you. You take those info to an attorney to see if you should withdraw from that point. You also have to inspect the roof again to see if they did a quality work, if you find anything wrong, you can use that reason to withdraw. If the sheetrock was damaged, request them to replace it. You have all the right to request the seller to fix everything to the previous condition before you buy unless it state "AS IS' on the contract. Then it'll be "take it or leave it" after inspection.

Lucky you just put $500 as deposit. It's not too much to lose.

Answer 6

Get a clue, my dear.  You signed a binding contract to purchase a property at a specified purchase price.  A nasty storm came through and caused damages.  As long as the seller returns the property to that which existed when you viewed the property, you are obligated to continue your purchase agreement.

You appear to be confused with the levels of damages which were incurred.  You are now afraid that more damages occurred than were covered under the seller's insurance.

That being the case, hire a private inspector to assure yourself that all damages have been properly remediated.

Answer 7

READ your contract!!  Talk to your realtor and attorney!!!

Why sign a contract you didn't bother to read or understand???  It clearly tells you what you are bound to do and when you have the right to get out of purchase and get your money back.  Don't ask us.  We don't have the information you do.  

And NO, your reasons aren't compelling.  Your inspection could determine these, but you are acting without any proof, just on what MIGHT BE.  And winds are capricious (just as are some people) and can damage one house badly and leave others next dooor unscathed.  Happens ALL the time.

Answer 8

OK, this is the way I see it.  Damage was done.  The damage will be repaired but you are not sure, and cannot be sure, that the repairs will deal with all possible effects of the damages that may appear in the future.  You want the house before the winds came through, the present house is tainted in your view.

I have no idea what a judge would say to this, but I think you should just kiss off your $500 and move on.  It was an act of God so to speak, the vendors are prepared to restore, those are facts, your worries are speculation.  How much will it cost you to go to court about this?  What are the best and worst outcomes?  Given your concerns I think losing the earnest money is not that big a price to pay.