Q: Request for Earnest Money Refund Options
I signed a contract to purchase a new house in Liberty Hill and paid earnest money along with an upgrade amount. Around the same time, I also bought a second home in Georgetown with the intention of making it my primary residence. However, I didn't end up moving into the Georgetown property as planned.
Nine months later, as the closing date for the contracted house approached, it fell through due to a financial contingency. The seller didn't grant any additional time and promptly relisted the house on the market, resulting in its sale within two days.
Following discussions with the seller about the return of my earnest money ($36,000), they agreed to apply it towards the purchase of another house within six months. I'm wondering if this is a viable way to recoup the earnest money and upgrade option amount.
A:
While it depends on the particular contract, most earnest money contracts for a house with a financing contingency (which is common) provide that the earnest money will be refunded to the buyer if the financing contingency isn't met. Typically, the Buyer only has the obligation to apply for a loan on the specified terms and conditions.
Check the Third Party Financing Addendum to your particular earnest money contract.
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