On a short sale, if a buyer back outs from an approved/accepted sale and has willingly forfeited the earnest money, who gets that money?
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On a short sale, if a buyer back outs from an approved/accepted sale and has willingly forfeited the earnest money, who gets that money?
We are not in foreclosure and the bank approved the sale. There will be a deficiency that the bank agreed to forgive. The agent and the contract are between us the seller and the buyer. The bank is not listed as the seller or even referenced in regards to the earnest money. Our agent isn’t sure what the bank is going to say.
Asked on August 11, 2012 under Real Estate Law, Wisconsin
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
From what you have written about, if there is no agreement between the seller and the bank holding the loan on the property being sold as to who receives the earnest money on a forfeiture of it by the buyer, then the seller of the property gets such because the seller is still on legal title to the property.
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