get deposit on house back
July 8, 2011 3:01 PM Subscribe
Are we entitled to our deposit for a house we put an offer on but canceled the sale due to the electrical wiring?
posted by ljs30 to work & money (13 answers total)
My wife and I recently put an offer on a house in California. Once the offer was accepted we put a good faith deposit of around $11,000 into escrow(3% of sale price). We then proceeded with a general home inspection. During the home inspection the home inspector found that the electrical wiring in the house contained copper and aluminum wiring as well as the old cloth type of wiring. It also had the Older 2 prong non grounded type of outlets at various areas. Basically the wiring was old, out of date, and possibly a safety hazard. It was Recommend to have a complete system evaluation and upgrade if needed by a qualified electrician. We then had a qualified electrician come to look at the house. He told us that the current wiring is basically a safety hazard, wasn't set up to code, and wasn't permitted. He recommended that we rewire the house which would cost about $8,000. We also got an over the phone quote of about $10,000 from another electrician. We then preceded to get a credit for the repairs from the seller. They were only willing to give us
$2,000. Since my wife and I don't want(and really can't afford) to spend an additional $6,000 or higher in repairs for our first house we decided to cancel the sale. We didn't want to live an unsafe house and we didn't want to pay to have it fixed. The cancellation paperwork was sent in within the 17 day contingency period. We then signed the paperwork with escrow to release the deposit. However, in order for us to get our deposit back the seller must sign the paperwork from Escrow releasing the deposit back to us. The problem is, the seller is refusing to sign. They say we don't have a legitimate reason to back out of the sale. Our real estate agent is baffled. He says the first 17 day contingency period is put into place so that the buyer can do their investigations of the house before moving forward. If something is found during the investigation that isn't satisfactory to the buyer, they are legally within their right to back out and get their full deposit back. As of now, we may have to get a lawyer and go into mediation. Any thoughts here? Are we clearly entitled to our depost? Or does the seller have a case? Any help here is very much appreciated!