Quote:
Originally Posted by Pturner
Isn't it the case in most places that if you put down earnest money and back out of the contract, you don't get your money back at all?
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It depends on the wording in the contract for sale. In most cases if one "backs out" one forfeits the earnest money or binder.
It also depends on the reason the buyer failed to complete the agreement. Inability to secure a mortgage can be a valid reason, consistent with the contract. Subsequent home inspection revealing certain problems with the property can be another valid reason.
The developer's willingness to contractually agree to apply the earnest money to a future sale is a win win situation. Developer is virtually assured of a sales at some point and buyer is virtually assured his earnest money will be applied to an eventual purchase.
Notice my use of "virtual". There are pitfalls. Before entering into any contract one should fully understand the consequences as they apply to their personal situation.