Do I have a claim as a seller to buyers earnest deposit?

UPDATED: Sep 30, 2022

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Do I have a claim as a seller to buyers earnest deposit?

We signed a legal contract through a realtor with a ‘cash’ buyer on Saturday
4/29/2017. Buyer showed a 2000.00 deposit for good faith. I am being told now by
my realtor that the buyer has walked away from the purchase because of his
funding to purchase was to be wire transferred by another party and that party
has changed their mind. The only contingency in the agreement was for
satisfactory inspections which buyer did not arrange for any before backing out.
I have the purchase agreement available to review by download or fax if needed.
Thank you.

Asked on May 3, 2017 under Real Estate Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Once the buyer actually breaches the contract--not merely that you are told that they will, but they do; i.e. the fail to do something by the date in the agreement (e.g. fail to provide another payment, if there is another one which they owe, by when it is due; fail to close; etc.)--then you can keep their deposit; when the buyer breaches, the seller gets their deposit. But you need there to be a breach, not just someone warning you that there will be or may be one.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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