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Tuesday, September 25, 2012

How much should I put down when buying a house? Can I just walk away and get my money back?

I am not an attorney. This is not offered as legal advice. Consult an attorney regarding escrow issues if necessary.

The real estate purchase agreement in Florida is named Residential Contract For Sale and Purchase for a reason - it is a contract

I always approach the preparation of a listing agreement or purchase offer with the same care as I know the written word is king.

If it isn’t in the purchase agreement, it isn’t part of the deal - especially regarding personal items and appliances that are to convey.   In other words, no side deals. 

As a real estate agent in Florida I prepare approved contracts - not create or modify contracts.

Sometimes I get the feeling buyers and their agents take the "walk away" solution too lightly.  Sure there are usually contingencies like a property inspection or financing which allow a buyer to walk away.

But just the option of changing your mind and walking away is not part of the process.

Since I am not an attorney I will just include here an excerpt from paragraph 15 (a) of the Residential Contract For Sale and Purchase says, in part,
"BUYER DEFAULT: If Buyer fails, neglects or refuses to perform Buyer’s obligations under this Contract, including payment of the Deposit, within the time(s) specified, Seller may elect to recover and retain the Deposit for the account of Seller as agreed upon liquidated damages, consideration for execution of this Contract, and in full settlement of any claims..."
So how much earnest money do I advise buyers to place as escrow?

As much as necessary to let the seller know your offer is serious and small enough you could live with losing if you forfeited it instead of closing.

I am not an attorney. This is not offered as legal advice. Consult an attorney regarding escrow issues if necessary.


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