SD Realtor – I agree with you and you are correct about the earnest money and default and the cost and hassle factor of a legal battle. The fact is that Escrow companies cannot release a deposit in the event of default unless all parties to the contract sign a release.
What I should have added to my post and made clear because of the facts of Tone’s situation is that taking the step of requesting the irrevocable release is a way of putting the Buyer’s “feet to the fire”. A financially weak buyer would panic and run, which in this market would be a blessing in disguise as Tone wouldn’t waste precious days or weeks waiting for the buyer to perform while the market dropped even more. This irrevocable deposit addendum request is a technique used to get a laggard buyer and agent to perform or get out.
Having said that, we know it is easy to get out of a purchase by suddenly having (engineering) a “financial situation” that would preclude qualifying or prevent proceeding, no matter how close to closing you are, and it is almost impossible to get any amount of damages if the buyer wants to fight it. The same applies for damages for a late closing.
