In a residential real estate transaction, they buyer is typically required to put a deposit down in order to show that he or she is serious about continuing with closing the deal. This deposit, often referred to as “earnest money,” is usually applied to the down payment when the contract is executed. But what happens if the deal does not close after the deposit has been made? Does the buyer get his or her money back?
As is often the case with legal matters, the answers to the questions posed above depend on a number of factors. Typically, the buyer is usually entitled to the deposit back if the deal falls apart for reasons that are not his or her fault. So, for example, if a buyer makes an offer, pays a deposit, and then the offer is subsequently rejected, the buyer would probably be able to get the full deposit amount back. Similarly, if a buyer is unable to secure financing from a lender after cooperating fully with the lender, he or she would likely be entitled to a refund of any deposit that was paid.
Buyers Should Always Consult with an Attorney
In many cases, the conditions upon which a buyer is entitled to a refund of any deposit that was made is spelled out in the sale contract itself, and many contracts can be difficult to understand for people without legal training. As a result, buyers should always have their contract reviewed by an experienced attorney to ensure that they fully understand when they can and cannot receive a deposit refund. In addition, in situations when the terms of a contract are ambiguous or there is a disagreement about whether a particular situation requires a deposit refund, there is a good chance that the issue could end up in court. It is highly advisable for parties to litigation regarding an earnest money deposit to retain an attorney familiar with New Jersey real estate law.
Call 201-498-9768 today for more information.
Real estate transactions are a complicated matter, and both buyers and sellers should retain legal counsel in order to protect their legal rights. John L. Schettino is an experienced New Jersey real estate attorney who was been practicing law for more than 30 years. To schedule a free consultation with Mr. Schettino, call our office today at 201-498-9768 or contact us online.