Profile picture for yb_liu

Can I get back deposit which has been cashed at escrow as down payment before bank accept offer?

I am in the process of buying a house in short sale.  I agreeed to have deposit used as down payment and the deposit has been cashed at escrow.  I am still waiting for the lender to approve the sale.  If I decide not to buy the house, can I get the deposit back?
  • July 01 2010 - US
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Answers (8)

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Profile picture for Ken Kho
In CA, the standard purchase agreement makes the purchase contingent on several factors. One is property inspection, another is the ability to get the financing you indicate in the agreement, and still another is appraisal, which means the house has to appraise, at the minimum, at the purchase price. I would think you can use the property inspection contingency to back out of the deal and get your deposit back. If you returned to visit the house after you made your offer, and you discover something that makes the house undesirable, you certainly can back out using the property inspection contingency and get your full deposit back. In CA, the buyer does not even have to give a reason, beyond simply stating that the property inspection contingency is being exercised. Again, this is in CA, and there will be something similar in your state.
  • July 01 2010
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Most likely. But ask your agent. With most short sales, you can back out prior to lender approval and retain your earnest money. If not - there are probably several other contingencies built into your offer to back out (inspection, financing, etc.)

Good luck!
  • July 01 2010
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You have to read your contract.  I realize you may have an agent that wrote your offer, but you signed the offer and you should know what the document says.

Hopefully you have reserved the right to cancel and get your money back.
  • July 01 2010
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Purchase agreements vary from state to state. And disbursement of earnest money also varies from state to state and depending on the language in the purchase agreement.

It might help to know what is the state where you are making your home purchase.
  • July 01 2010
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You should be able to get your deposit back, what state are you in? In California we do not deposit funds untill the bank approves the sale.
Real Eatate laws very from state to state. Contact your Agent and ask them.
Good Luck!
  • July 01 2010
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Profile picture for wetdawgs
Are you canceling your offer within the limits of reasons described in your original purchase contract?  If that is the case, you probably can get your money back. 
  • July 01 2010
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Probably not, You should contact local competent legal counsel.
  • July 01 2010
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Profile picture for nwhome.us
Under most conditions the Earnest Money is refundable if you legally terminate your offer.
You have to "decide not to buy" under the conditions outlined in the Purchase and Sale Agreement.
  • July 01 2010
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