I canceled my contract within the option period however the title company will not release the earnest money because the seller will not sign a release of earnest money. Why?
Although you may have canceled the sales contract within the stipulated option period the title company is not a party to the contract and is not allowed to interpret the sales contract. Upon termination of the sales contract within the option period you are no longer under contract to purchase the home however the sales contract does not explicitly instruct the title company to release the funds. The title company must have a release of earnest money on file signed by both parties. If the seller refuses to sign the earnest money release you may have to sue the seller to force action. The good news is that the title company may help you and may be able to recover attorney and court fees. The other good news is the seller may not accept another offer on the home without first releasing your earnest money.
Related Questions
- I canceled my contract within the option period however the title company will not release the earnest money because the seller will not sign a release of earnest money. Why?
- What if the contract fails and the seller and buyer cannot agree on who is entitled to the earnest money?
- What Is an Earnest Money Contract?
