CAN THE SELLER KEEP MY ESCROW DEPOSIT?
ISN’T THAT EVERY BUYER’S WORST NIGHTMARE?
The answer is “YES!” … to both questions!
The seller can keep your deposit … if you fail to adhere to the time-frames and the terms of the contract.
One of my sellers just heard from FREC (Florida Real Estate Commission):
My “seller” was awarded the “buyers” full escrow deposit … and rightfully so! Here’s why…The contractual terms and timeframes were not adhered to, and the buyer’s Realtor was basically incompetent: “Failure on the part of the buyer (and the buyer’s Realtor!) to provide notice of inability to obtain financing within the loan commitment period resulted in the buyer’s loss of escrow money!”
My seller, Mrs. Estate (no … not her real name!), was packed and ready to close and vacate… and ready to sign over her house to the buyers… So what happened?
ON THE BUYER’S SIDE: The buyer did not actually qualify for a mortgage (and failed to advise the seller of his inability to obtain financing), although he marched on toward the closing date as though he had… or would … or could. The buyer’s Realtor did not relay that ‘complication’ on to any of the other interested parties either: seller, seller’s attorney, or me (the seller’s Realtor). By not disclosing the ‘hiccup”… and by not asking for an extension to the contract, the buyer (and his Realtor!) put his escrow deposit at risk. That disregard to contractual terms resulted in the buyer losing his entire escrow deposit.
Can a seller KEEP your escrow deposit? The answer is ‘yes’. A seller can keep your escrow deposit for failure to perform, or failure to adhere to the terms of the contract. In an escrow dispute (where the Broker is holding escrow) FREC determines which party (buyer or seller) is entitled to the disputed escrow deposit.
DON’T PUT YOUR ESCROW AT RISK. Adhere to the time-frames… and work with a competant Realtor! Buying or selling property in Miami? I can help with any of your real estate needs. Call me at 305-793-1365, or feel free to drop me a note here.
