Q: Real estate question.
A buyer wanted to purchase my property in Dearborn Heights on a land contract. He gave me a cash deposit to hold property
No signed contract no receipt. A week after I got a call from buyer that he does not want the house anymore and he wants his deposit back. Can I keep the deposit or do I have to give it back?
A:
Without ANYthing writing it is hard to say for sure where this stands.
Generally speaking an 'earnest money' deposit is something that can be forfeited if the deal falls through because of something the buyer does or doesn't do properly. BUT without an offer to purchase the status of that deposit is unclear.
CAN you keep the deposit? Sure.
SHOULD you keep the deposit? Unclear.
WHAT HAPPENS if you do? You open yourself to a lawsuit.
What SHOULD you do?
Seek local representation to review all the facts and provide you some legal advice about the best course of action.
--This answer is offered for information only and does not constitute legal advice or create an attorney/client relationship. Please seek local licensed representation if you have further questions.
Brent T. Geers agrees with this answer
1 user found this answer helpful
A: If the agreement was for you to "hold the property from putting the home on the market, for a short then you may be able to keep it. Otherwise my suggestion is that you return the deposit. Without a written purchase agreement, you do not have a valid contact. Real estate transactions, especially those dealing with purchases, need to be in writing under the Statute of Frauds. Based on your facts, you haven't even detailed the terms of how the deposit was to be treated. Questions remain as to when the deposit was to be credited to your proposed buyer or what bank or title company was holding the deposit. What other contingencies affect the deposit? Without written detail, this 'transaction' is difficult to enforce. Hence, the need for a written document with specific provisions to guide the parties to a closing.
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