Seller won't return deposit after financing failed - Home buying question

[MMP]

why not just get a formal denial letter from the bank if they wont accept the email?. You bound your offer with a deposit, you can get it back if denied financing. I live in MA and have bought and sold several properties. Threaten a 93A unfair business practice lawsuit. It shouldnt come to that.

[neufox47]

Thanks, will look into the 93A and make sure it applies. I sent them a copy of the formal letter. I asked my broker if there was another letter that they send to deny loans. His answer was no. That is a formal denial letter. My conclusion is that they are seeing if I will cave and say it's not worth the effort to get it back.

[Micol]

Thanks, will look into the 93A and make sure it applies. I sent them a copy of the formal letter. I asked my broker if there was another letter that they send to deny loans. His answer was no. That is a formal denial letter. My conclusion is that they are seeing if I will cave and say it's not worth the effort to get it back.

The state real estate governing boards are usually pretty good at stepping in and resolving these types of issues. Also, RE agents have to carry Errors and Omissions Insurance which I think the board can use to rectify problems. Although, I am not sure if this fits under E&O. But, they are def obstructing your right to a valid refund. I have heard people say Real estate agents make used car salesmen look honorable... I don't know many so I can't say. I hope this works out in your favor.

[Buke]

I was in a similar situation a few years ago only I was on the other side and the deal fell through because the buyer (and his agent) were complete idiots and didn't apply for the type of financing that the P&S agreement specified. I told them that by not applying for financing in accordance with the purchase and sale agreement they waived their right to the earnest money (that's how the P&S was written). Two attorneys that I spoke to agreed. So did my real estate agent. So did some case law that we couldn't reference in court. In the end I gave the money back anyway because it would have cost more than the earnest money to defend myself in court and then I would be subject to a judgment that may not go in my favor if the judge disagreed with our interpretation of the law.

I don't know what things are like in MA but in WA earnest money doesn't really mean anything in a residential transaction and it's almost impossible to lose it no matter what happens. My advice, talk to your agent and/or attorney, put your paper work together and if things get sticky have your attorney write a persuasive letter explaining why, by law they don't have any right to withhold your money. Reasonable people respond well to that sort of thing.

[From_the_NEK]

I wonder if Dan Samas practices real estate law in MA on the side?