Wednesday, June 16, 2010
Help Me Howard: $5,000 Deposit
Is a deposit refundable, whether you are buying a house or a car? One woman thought so. In fact, she was positive. But the seller refused to return her $5,000 when the deal fell through. What should you do to protect yourself when you buy something? It's why she called Help Me Howard with Patrick Fraser.
WSVN -- If you are looking for real estate, everyone says, this is the perfect time. Unless you are one of those people looking for real estate.
Carol Martin: "It could be a beautiful home, a good price. And then once when we enter contract, it's always something."
Carol and her husband were ready to buy, and found a house in Miramar that an investor had bought in foreclosure.
Carol Martin: "I already pictured my kids running in that backyard and us living in the home in the future."
They agreed on a price of $345,000 and put down a $5,000 deposit. Then, the bank's appraisal came back.
Carol Martin: "The appraisal came out at $335,000, $10,000 less."
Carol says, she asked the seller to lower the house to the $335,000 it appraised at. She says, he said, 'No.' So she tried again.
Carol Martin: "I said, 'Well, can we meet halfway?' He said, 'Absolutely not. I cannot lower the price.'"
Carol says, that killed the deal. So Carol asked for her deposit back, and she says, the seller again said, 'No.'
Carol Martin: "The seller has refused to sign this termination of contract and release the funds in order for us to obtain our $5,000 back."
Carol is meticulous and has every document in the deal, including the page that requires her deposit be returned.
Carol Martin: "Which does indicate if the property appraises lower, we can back out of the contract, because it did not comply with FHA standards."
Carol needs the money, 'cause without it, her goal of being a homeowner is stalled.
Carol Martin: "I want my $5,000 back to put towards another house."
But Howard, how can you force someone to honor a contract and return a deposit if they don't want to?
Howard Finkelstein: "This is not an uncommon situation. In fact, the civil courts are filled with cases of people trying to get money they are owed. And in this contract, it's crystal clear that Carol gets her deposit back. There is even a clause that says if she has to sue, her attorney's fees are paid by the seller."
The seller's company buys foreclosed properties in Broward County. I called him three separate times. He never returned my calls. Finally, I spoke to his attorney, who has helpful. He said, there was a dispute over the facts, that his client said, he had agreed to lower the price of the house. Carol said, that's not true. But the $5,000 was then returned to Carol. The key for her was the contract.
Howard Finkelstein: "In some contracts, you lose your deposit. In others like this, you get it back. The key is putting language in the contract that makes it clear that you get your money back. Make sure it's in there, and make sure you read every word in that contract."
Carol got her deposit back and has now found another home. It was a headache, but in the end, it all turned out well.
Carol Martin: "The lesson is that you really have to do your research and really get smart people to help you out."
Patrick Fraser: "When she was talking about smart people, she obviously wasn't referring to us. And Howard mentioned reading the contract. If you aren't sure about all that long, boring, complicated legal jargon, get a real estate attorney to look it over for you. It won't cost much, and it could save you thousands."
A convoluted mess left you in a real state of despair? Deposit it with us. We are actually a pretty good deal, 'cause we are free.
CONTACT HELP ME HOWARD:
EMAIL: firstname.lastname@example.org (Please include your contact phone number when emailing)
REPORTER: Patrick Fraser at email@example.com