Trending
Dear Mr. Feichthaler:
I am in the process of selling my home and have received several offers. All of them require varying amounts of escrow deposits. What happens if I sign a contract and they don't make the deposit on time (3 days from signing of contract). Can I just move on to the next buyer?
-- Erica S.
Dear Erica:
Previously, I have written of the importance of obtaining a sufficient deposit to help confirm you have a serious buyer. Many "flippers" will offer as low as $100 on a deposit, and throw out as many offers as possible. Typically, a deposit of no less than 1% is vital, I recommend 2% of purchase price or higher.
To your question, it is important that all sides meet the requirements of the contract. As seller, your main requirement will typically be providing a title commitment within a certain amount of time from the firm you choose to handle the closing. As buyer, the escrow deposit is typically the first task to complete. The buyer can provide this by wire or personal check, but it must be delivered to the title company in a timely manner. If the buyer does not provide the closing firm the deposit as required, in a timely manner, the buyer is in breach. Generally, you could exit the contract based on this, if you are certain they have not performed as required. You could then contract with another buyer. One other item to consider is that, even though the buyer did not provide the deposit, they may still be obligated to do so under the breached contract. In most cases, the seller moves on to a new buyer and does not pursue the matter further. However, as seller, you may have the legal right to pursue payment of the deposit. Plus, the standard real estate contract provides for prevailing party attorney's fees.
These cases are fact specific, so I recommend anyone in this situation seek legal counsel prior to cancelling contracts. The great news is that, if your buyer does fall through, there should be another following soon after. Happy selling!
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.