Earnest Money Refund (sales, house, job transfer)

[Aliana926]

Hi All,

We signed with a contract with J.Patrick in July, paid our earnest money (check has been cashed) and have gone to our 1st appointment at the design center. With the economy/oil gas companies laying people off, we are worried that we won't be able to sell our house and that my husband's job may be unstable. Can we terminate our contract and get our earnest money back?

Thanks!

[ilikepizza]

As a buyer you have a Realtor, right? That's definitely a question for your Realtor as they will have read over the contract and will work with you and have your best interest. Do you have a finance clause?

[smuggy_mba]

Originally Posted by Aliana926

Hi All,

We signed with a contract with J.Patrick in July, paid our earnest money (check has been cashed) and have gone to our 1st appointment at the design center. With the economy/oil gas companies laying people off, we are worried that we won't be able to sell our house and that my husband's job may be unstable. Can we terminate our contract and get our earnest money back?

Thanks!

If the work has not started on the house, talk to the sales person. Generally these are non-refundable but if the construction has not started, you might give it a shot. I'm pretty sure the contract says it's non-refundable (that's pretty much a standard statement.)

[H-towngreen]

Non-refundable unless you have a darn good excuse. Husband actually loses job, job transfer, etc.

[texasroots77]

Read your contract. Typically EM is to say I am serious and home or lot is taken off of the market. Just because you change your mind does not mean EM is refundable. Builder probably could have sold that home or lot to someone else. Or did you make it contingent on selling your home? If so this should protect some of your EM if you cannot sell.

[haudi]

Not true. Every builder I've talked to will refund earnest money. It's the design center deposits and so on that you can't get back.

Originally Posted by H-towngreen

Non-refundable unless you have a darn good excuse. Husband actually loses job, job transfer, etc.

[Houston321]

So you expect a business to take a lot off the market for 2 months, waste man hours and then just give your money back? No way.

[H-towngreen]

Originally Posted by haudi

Not true. Every builder I've talked to will refund earnest money. It's the design center deposits and so on that you can't get back.

I've worked for numerous homebuilders. Unless you are unable to qualify for the home, the builder can retain the EM. It really just depends on where you are in the process and how nice your builder wants to be.

[Failed Engineer]

It's down to your negotiating skill at this point. I'd tell the builder that you don't want to buy the home and that your husband's job has become very unstable (just tell them he works for SLB, lol) and that it's very likely he will get laid off before closing, and they will be stuck selling an already completed home 6 months from now when the market will have already softened.

If you approach it right, and the builder is looking at the overall picture, they will let you out and refund you. OTOH, if they want to stick it to you, they in all likelihood can based on the boilerplate earnest money contracts all builders use.

[diggity101]

They won't be stuck with anything. If the buyer is going to back out, they can keep the money and sell the home to someone else. Any upgrades the buyer did to the home will have to have been paid for.

I just don't see a huge incentive for the builder to give the money back. The threat of a possible layoff isn't going to move the needle.