options to get earnest money back
Here's the cliff notes of my situation:
Signed the P&S with $20k down early last year on a pre-sale. One of the addendums was to release the earnest money to builder instead of holding in escrow. Fast-forward a few months, I was laid off at the end of Sept with the closing date of Nov coming up quickly (have since found a job). Made the effort to try and obtain financing - clearly was not going to happen. Builder refuses to return the earnest money, stating that the money was for all the enhancements requested in the P&S. We never waived the financing contingency. Solicited an attorney to provide official notice of contract cancellation and demand earnest money back. There was correspondence back-n-forth between builder's lawyer and ours. Bottom line was still no (in early Dec '08).
Did a quick check over the weekend and the house was sold on 1/27/2009.
What options do I have now to get the $20k back?
Signed the P&S with $20k down early last year on a pre-sale. One of the addendums was to release the earnest money to builder instead of holding in escrow. Fast-forward a few months, I was laid off at the end of Sept with the closing date of Nov coming up quickly (have since found a job). Made the effort to try and obtain financing - clearly was not going to happen. Builder refuses to return the earnest money, stating that the money was for all the enhancements requested in the P&S. We never waived the financing contingency. Solicited an attorney to provide official notice of contract cancellation and demand earnest money back. There was correspondence back-n-forth between builder's lawyer and ours. Bottom line was still no (in early Dec '08).
Did a quick check over the weekend and the house was sold on 1/27/2009.
What options do I have now to get the $20k back?
Comments
I don't know the specifics of your P&S agreement, but I think I had a similar situation with a place I had under contract 2+ years ago. I had put down earnest money and also paid some money for upgrades on a place under construction. The deal did not close because the builder did not finish construction on time.
When I went to get my money back, they tried to keep the money for the upgrades. In my situation - I had an agent who went back to them. As I recall, the request was something like - "Tell me exactly what clause in the agreement it is that makes you think you get to keep that money?"
got a check 2 weeks later. Of course, this was 2006 when builders still thought they could find a greater fool. They will probably fight harder now.
Your consolation is that prices and/or interest rates may fall enough that your savings when you do buy may well be greater that $20K.
well, i did not pursue further legal action because of:
a. escalating costs - my lawyer confirmed that it would be pretty expensive to litigate - and when we win, it could take years to get the money back including fees.
b. the house did sell for 17.5k less.
assuming you got competent advice - I'd guess you are left with what Jon suggests - the consolation of knowing that you can probably buy the same house for much less than $20k off next year.
That makes your financing addenda null and void.