How do I go about getting my earnest money back?

UPDATED: Sep 30, 2022

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How do I go about getting my earnest money back?

On 11/04 I entered into an agreement on a house and put 1k as earnest money which was contingent upon inspection and major issues. Upon inspection of the property, it was found that the house had structural issues. In order to look into it further I called Acculevel to assess. They said that work was

needed to ensure the side of the house which included the garage as well as a room above the garage would not sink or crack further. I then asked the sellers to have a structural engineer come out to assess the issues since I had paid for the inspection and had gotten Acculevel out. The structural

engineer said that there is structural issues but not a huge concern but had said work was needed to ensure no flooding in the garage as well as to assure that no further movement of foundation would occur. I then sent a counter to the sellers asking them to pay for repairs. They declined. Then we asked they pay half of repairs and they declined again. Then I signed a mutual release form asking for our earnest money back and the sellers refused to sign. After many phone calls and mediation between our real estate agent and their, they continued to refuse to return the earnest money and refused to sign the mutual release. We had then sent another form to them requesting a 50/50 split which they again refused. Then they entered into contract with another party on the property without signing the mutual release from us. We simply want our earnest money back because they refused to help with the repairs for structural issues. All the while with the inspections, acculevel and so forth, I had to fly between states every time to make sure that I was aware of the issues, which did cost a significant amount of money just for travel.

Asked on January 24, 2017 under Real Estate Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the written contract or agreement of sale contained the contingencies you refer to and if, under the facts (e.g. the structural issues and the seller's lack of a response to them) they should return the earnest money but don't, you could sue them for breach of contract (violating the agreement's terms) to get the money back. For $1,000, suing in small claims court on a pro se (as your own attorney) basis is a good idea.
If the written contract did not contain these contingencies in writing and it was just your oral understanding, you will not be able to get the money back: when there is a written contract, it controls, and any extraneous (outside the contract) oral agreements or understandings have no enforceable effect.

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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