Can a seller legally keep my earnest money deposit even if they already resold the property to someone else?
This will depend on a number of factors. The first question is whether you were in default. If you were, the next question is whether the contract provided for liquidated damages. If validly worded, such clauses may provide the legal basis for a Seller to retain a deposit after a Buyer’s default. The idea behind such clauses is to provide the parties with a mechanism to settle contractual damage issues without resort to court. In the absence of liquidated damages, the issue that controls the Seller’s legal right to keep all or a portion of your deposit is whether or not he sustained actual damages by reason of a default on your part. Elements of actual damage would include the following: (1) if it was sold for less, the lesser amount realized by the Seller from the subsequent sale of the property, and (2) the additional carrying costs and/or expenses incurred by the Seller as a result of your default. If the sum of these amounts is greater than the amount of your deposit, the Seller ha
