Q: We are trying to sell our home and need to move out of the area in the near future because of a job change. We are under contract with a lovely couple, but their deposit check did not clear. What should we do now? — Minnie
A: Occasionally, a check may fail to clear for reasons not the drafter’s fault. Ask the buyers why their check did not clear, and if they share a good reason, have them immediately make the deposit with certified funds or a wire.
If they can not, or will not, cooperate with your reasonable request, move on and find a new buyer.
However, if they can do it, you can move forward with the deal while looking for other warning signs.
The initial deposit, or “earnest money deposit,” is how purchasers show they are serious about purchasing your property. With most purchase contract forms, a seller is limited to getting the deposit amount if the buyer defaults, so make sure to get a sufficient amount.
It would be best to ask for a minimum of five percent, but more is better, with 20 percent of the purchase price being the goal. A larger deposit keeps the buyer motivated to purchase your home. It is easy for a buyer to walk away from a $1,000 deposit but much harder to walk away from $20,000, so a larger deposit makes your transaction more likely to close.
Remember that nice people are not always good, and these buyers have already shown a warning sign. Carefully review your contract and write down all of the deadlines. These important dates should be strictly enforced.
In my experience, most failed transactions have multiple warning signs, such as issues with the deposit, missed deadlines, or attempts to renegotiate the terms after the ink is dry.
While one of these issues, standing alone, does not mean your transaction will fail, when more issues show up, you should be concerned.
Board-certified real estate lawyer Gary Singer writes about industry legal matters and the housing market. To ask him a question, email him at gary@garysingerlaw.com, or go to SunSentinel.com/askpro.
