TemekuT – In the event of any default, there really is no such thing as an irrevocable deposit. That is not to say I haven’t seen cases where sellers didn’t keep deposit money that exceeded the actual damages they incurred due to the default. I agree with you, and frequently do (as I did with the escrow described above) demand that the earnest money be conveyed to the seller upon release of contingencies and that it be non-refundable.
Now the reality of the situation is that if there is a default and the seller keeps earnest money, the seller is really entitled to only keep money to cover real damages incurred. So as a seller you need to be able to prove that the monies kept are for realized loss or expense incurred. Again, most buyers don’t know it or have the wherewithall to fight it in court. This is the case even if in the contract you specified that the deposit is not refundable and even if it has already been conveyed to the seller. Again, most buyers don’t know or understand this.
Rustico – True there has been no failure to perform. My advice was to insulate the seller against additional expense incurred in the case of a late closing. If closing day comes and the buyer cannot perform it is well to late to try to push an ammendment through at that time to get compensated. If you wait until then you will not get anything. Also if the contingency period has already passed there is no risk at all to try to establish this ammendment. There is not any way for the seller or the listing agent to get any insight into the progress at the lender. Lenders will not even talk to anyone except the mortgage broker. So, if you 100% trust the mortgage broker then okay, don’t do anything, yet I don’t trust most mortgage brokers so I would advise to do whatever possible I can to insulate yourself from their behavior.
