State Specific Question About: GEORGIA (GA)

My fellow investors,

I recently put in an offer on a property in the end of April with a closing date May 1st, half way through the process and due to the pandemic my investors decided that they was no longer lending money until further notice so I contacted another backer who assured me they will get it done however we would have to extend the closing date until the 12th of May. as the closing date near I asked the seller for an extension invoking the 8 day clause that is apart of the contract. The agent for the seller ignored the extension and relisted the property on the second of May. Later from her letter for why she should keep the EM is because we did not close on the 1St and she did not want to extend for another 26 days (do not know where she got 26 days from)

The seller says she should keep the earnest money because we did not close on the first of May however we did invoked the 8 day clause. My question is have any of you encountered this and what was the outcome?

PS: We both went through the process of stating our case of why we should keep the earnest money with no conclusion my realtor broker wanted to give each half of the money which we both said no to it, any help and advice would be helpful.

Thank all for your time,

Seller is due the funds.

Seems clear by the contract.

When you told seller you could not close until 12 days later.

And was not allowed by the contract.

The 8 day clause had no meaning.

Not knowing what the "8 day extension clause" is, I'd say without a written extension of the May 1 closing date, you're out of luck unless the initial contract has some very broad "pandemic/public health" type escape.

End of April we were all well into "pandemic mode" so you should have known your investors weren't lending when you made the offer.

I put in an offer for a shopping center around the last financial fallout -- 2007. I had to give a large deposit, but had clauses in the offer that would allow for an extension provided:

a) I was acting in good faith

b) I had been cooperating with the lender, appraisal, agents, seller and escrow.

One bank asked for more of my real estate business. They knew I had many income properties and accounts for each one. I already had with this bank several growing real estate accounts. So I applied for a mortgage of only 25% of the purchase price, the rest I was going to put down. The bank changed their lending practices and only wanted to lend out $1,000,000 on commercial properties.

So the Bank informed escrow, even before they contacted me, that they declined the loan. The seller put the property back up for sale and sent me a letter that I had defaulted and they were going to keep my depoist.

The contact didn't expire and I still could have asked them for an extension.

So I went to 5 other lenders and within 24 hours had all 5 lenders giving me a letter of qualification. My attorney had his process server deliver to the seller and their agent that I was willing to close the deal as agreed, all they needed to do was agree to honor the contract.

The seller thought he could sell the property to someone else and keep my 100K deposit. So we (my attorney and I) filed a lien against the property so it couldn't be sold and then prepared a lawsuit.

If you had a financing contingency in the contract then it seems you should get the earnest money back since you could not get financing.

Also in your case. I would have offered to increase the deposit by a few thousand more. Whatever needed to buy a extension for a few days or a month.

Unless you where not sure if you would close and risk the funds. In which case if you are not 100% sure you will close. Then dont expect the seller to believe it either.

I have no idea what your "8 day clause" is about - you would need to put it in your post for us to know if that clause helps you or not. Please parapharase or copy the '8 day clause' so we can have the information as it may or may not effect the escrow disbursement.

There are generally several contingencies in the P&S contract, unless you waived them: appraisal, inspection, financing, clear title and any other clause you may have required (estoppel info etc).

In the meantime, Ken is right. The brokerages have no say on a contested EMD. If both the seller and the buyer lay claim to the deposit and there is an escrow dispute, then the real estate commission determines who gets the funds with an EDO (Escrow Disbursement Order). The brokerages know, or should know, this. They have no say on your EMD.

UPDATE MY INFO ABOUT THE 8 DAY CLAUSE THAT IS APART OF MY CONTRACT! I HOPE YOU CAN SEE IT AND UNDERSTAND TO GIVE A HONEST OPINION. THANKS

4. ClosingDateandPossession.

a. RighttoExtendtheClosingDate:BuyerorSellermayunilaterallyextendtheclosingdateforeight(8)daysuponnoticetotheother

party given prior to or on the date of closing if:

(1) Seller cannot satisfy valid title objections (excluding title objections that: (a) can be satisfied through the payment of money or by bonding off the same; and (b) do not prevent Seller from conveying good and marketable title, as that term is defined herein, to the Property);

(2) Buyer’s mortgage lender (even in “all cash” transactions where Buyer is obtaining a mortgage loan) or the closing attorney is delayed and cannot fulfill their respective obligations by the date of closing, provided that the delay is not caused by Buyer; or

(3) Buyer has not received required estimates or disclosures and Buyer is prohibited from closing under federal regulations. The party unilaterally extending the closing date shall state the basis for the delay in the notice of extension. If the right to unilaterally extend the closing date is exercised once by either the Buyer or Seller, the right shall thereafter terminate.