EARNEST MONEY: the buyers couldn't obtain the loan (bc they didn't have SS#) How do we keep the earnest money?

Question

What is the name of your state (only U.S. law)? Tennessee

Hi, We have been trying to sell our home for the past 3 months, 2 months ago, we had an offer from a hispanic family with Su Casa Century 21 Realty representing them. We accepted their offer and they said they wouldn't be able to close for another month because the loan may take a while. Because they are illegally in the United States, it was going to be harder for them to obtain the loan. HOWEVER, the home seller ASSURED us he was a legal immigrant and had the proper documents and a social security number, THEREFORE, we agreed on their offer. In the meantime (1 month before the closing date) we had numerous interested buyers that loved the house, and wanted to make an offer, but we turned them down because we RELIED on these buyers to buy the house. A month later come closing time, we get a call from the lawyer's office saying they're not ready to close. Then on, we try calling the realtor almost EVERY SINGLE day, without getting a response. We just wanted a reply. We wanted to know what was the issue etc. The realtor doesn't speak much english either, and whenever I'd call the office a REALLY rude lady would answer the phone and inform us that she's not there and she'll call back, but we've NEVER got a phone call from the actual realtor, she did actually email us telling us, because the home buyers couldn't afford the house, bc they weren't able to get the originally loan offer they wanted (they actually ended up having to pay a higher interest rate, and they "couldn't afford it") they would receive the earnest money back. An acquaintance of mine's father is a lawyer, and i talked to her. she told me that the buyer NEVER gets the earnest money back. She suggested that we sue them for breach of contract. She said because we RELIED on their buying the house to pay for the mortgage, we should sue them and get the lawyer fees, earnest money, and detrimental damage back. My question is, Is this really true? what kind of action should we take? I've called the realtor's office countless times, and the lady that answers the phone has ALWAYS been EXTREMELY rude and told me to have our lawyer contact them. WHAT SHOULD WE DO!?!

Answer 1

An acquaintance of mine's father is a lawyer, and i talked to her. she told me that the buyer NEVER gets the earnest money back......

---the lawyer is full of Bologna.  Just look at the "inspection" clause.

UNfortunately, the law would not go well with you; you KNEW the

buyer was an illegal.........and while an illegal person can buy

whatever they want, wherever, their legal right to be in the US

to go to an escrow company to sign closing papers is in doubt.

YOU knew someone could probably not close and yet, you

hoped that the agent and the buyer could be held responsible.

Also, go to the broker of the agent and inform them that

you are going to the real estate commissioner and file

a complain for ETHICS violations, which this is.

NO licensee can withhold information from anyone involved in a

transaction that affects that transaction.

Also, go to the Realtor's ASSn board and file a complaint

alleging the same thing.

IT makes no sense that any agent that you talked to has a license

and yet, speaks poor English; they have to go to RE school

and study in English and take a state test in English.

FIND a  new agent quickly!  YOU seem able to get a buyer.

And you don't have to have an agent to sell a house; just

meet the buyer at the title/escrow firm where the

money would change hands anyway!

Answer 2

Dig up the other offers and give them a call to see if any of them still interested to buy your house. You already wasted a month to sell your house, you should not waste more time on arguing whether should keep the deposit. You know the deposit can't compensate much of your time you lost. Move on now rather than stuck with someone who will never close the loan.

I tried the "sale by owner" method but the buyers that came to me were not serious so I end up hire an agent to do it for me. With the help of the agent, you can do multiple counter offers which assure you sell your house at the best price and close on time. Also the buyers should remove the loan contingency within certain time that list on the contract. Request the buyers submit offer with their loan approval letter next time to protect yourself.

Answer 3

Were you selling this For Sale By Owner? and agreed to pay a commission to the REALTOR who brought you a buyer? Do or did you have an attorney?

What happened to you is because you had no professionals helping you in the whole process. Most likely these people can get out of the contract and you will have to refund their deposit because the terms of most contracts are that the if the loan is not granted then there is no transaction and the buyers get their money back.

You need to release the escrow and look for a real buyer. You may also want to hire a good REALTOR  to list the house and screen and adivise you about each offer that comes your way. If you don't want to do that then the very least you should do is to hire a real estate attorney to advise you.

By the way, don't ever deal with that Real Estate Company again and I would recommend that you call the local Board of REALTORS and ask for the procedure to file a complaint. Be sure to document everything -- hopefully you still have the signed documents and some emails that you can print out.

Answer 4

The buyers were lied to by the real estate company, too. I'm sure they were promised they would be able to buy the house. Personally, I would not keep the money. They were victims, too.

Answer 5

I have met the similiar problem before -- still a little bit annoy,here is a good resource that help me out.http://home-mortgage.online-tips4u.info/...

Answer 6

I had this happen 3 times in 1 year. Each buyer had a Social Security card.  Unfortunately for the seller, the buyers had purchased the cards on the streets of downtown Phoenix.  All 3 were rejected.  Of course, you deserve the earnest money.  They wasted a month of your time.  I have never had anyone sue in real estate and walk away saying that they were satisfied with the result. Please prove me wrong.  I would just put the house back up for sale and get back to work selling it. /