What to do with the earnest money when a buyer defaults after waiving the contingency
03/30/2017 | Author: TAR Legal Staff
If a buyer waives the contingency under the Addendum for Sale of Other Property by Buyer, then can’t close, does she get the earnest money back?
No. If the buyer can’t close because the buyer didn’t sell her other property, the buyer will be in default. Paragraph D of the addendum states that if the buyer waives the contingency and then can’t close and fund because she did not receive the property’s proceeds, she is in default and the seller may exercise the remedies in Paragraph 15 of the sales contract. One of the remedies available to the seller is to terminate the contract and keep the earnest money.
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