A Licensed Mortgage Broker who gets earnest money!
I am selling a house in South Florida to a woman who is a licensed
mortgage broker/real estate agent. We had a contract which stated
contigent on her getting a conventional 30yr fixed mortage at 95%. She
had 30 days to qualify. She also put $10,000.00 in an escrow account.
We were sent a pre qualifaction letter and showed that she had
sufficient credit and funds. A week before the closing which was the
30th day, she faxed my agent a denial of funds letter, which stated
she was denied the mortgage due to insufficient funds and bad credit
and will opt out of the contract. My agent has followed up during
this 30 day period and was told that everything was moving along.
Then this happened. The title company had asked her how this could
have happened? She claimed she did not know her status of credit.
After explaining to her the possibility of her loosing the earnest
money to me, she later explained that she was only approved for a 90%
loan and was short $15,000.00. We were told that she still wanted to
purchase the house only if I would consider to hold a note for this
amount. We verbally agreed to terms and had our attorney draw up the
paper work prior to closing. On the closing day, she opted to back out
based on her original statement of insufficient funds and credit. I
am pretty confident that she ethically is wrong here and I will be
handed the earnest money, however can I sue her in a civil manner?
Your thoughts?
My bet is, you will not be just handed the deposit. If you read your
listing agreement and the sales contract closely, you will discover some
interesting clauses. Based upon the norm, I'm pretty certain you will
find that the escrow agent has the right to deposit the funds with the
local court and remove themselves from the argument. It will then be up
to you to prove to the court that you are legally entitled to those
funds. Keep in mind that if you win the legal argument, your agent will
most likely be entitled to the lesser amount of, half of the deposit, or
the amount the commission would have been, if the transaction had been
successfully completed.
As far as a sweet-tooth, well I am just looking at this licensed
professional taking the contract to the closing date, then telling us
forget it. Well that just seems wrong.
Looks like a real estate commision will be making the decision on who
gets the money. that's just fine with me. As far as going to
court in a civil manner, well I am consulting with an attorney now and
will get his recommendation on any further action.