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How to get back earnest money back from seller?

Few days back, I signed LOI with seller for a gas station for lease. I asked for 30 days worth time to do closing. After doing a due diligence for a week, I realized that this deal will not be a good deal. So I asked seller that I am backing off. Now seller is not answering my phone or trying to contact me.
How can I get the earnest money back? Earnest money check was deposited in seller;s account. Will I ever get my money? what should I do? Please help.

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Answers (3)
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The BAF Group LLC

Nick, the only way to go then is to do what you are doing: Seek the assistance of an Attorney. If the LOI did not specifically address the return of the deposit money, an Attorney will need to look at the document to determine what, if any weaknesses there otherwise may be, in order to offer to legal redress.

Part of the "intent" in an LOI normally is to give the Buyer the chance to do his/her due diligence and make an informed decision as to whether the business in question is worth what the Seller says it is. Therefore, our LOIs ALWAYS allow the Buyer to escape with his/her money back, and with no other implied or express obligation on the parts of either the Buyer or the Seller, in the even the Buyer changes his/her mind. But, normally the Seller has the same escape clause, so that if a Buyer comes in with more money, faster ability to settle, the Seller can also withdraw. Theoretically, it lays a foundation for price and general terms, as well as an agreement of what the Buyer needs to make the final decision, which alerts the Seller as to what he/she needs to provide to make that happen. That gives each side the incentive to work quickly, so the other side does not lose interest.

I hope this works out for you.

Sep 25, 2011
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Bergen County, NJ

Thank you for answering. I will be consulting a local lawyer. My LOI doesn't have any specification about returning the earnest money. I did not realize until I decided to back off and asked for my check. Earnest money was $20,000. I did not want to buy his business.

Sep 25, 2011
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The BAF Group LLC

What did the LOI say? Does it give you the ability to get your money back? Some do...some don't. How much was the earnest money? Can you file a lawsuit on your own in small claims court? (If a sherriff shows up with papers with a court date that says you are suing him - not threatening, but actually have a court date - the Seller may suddenly understand you are not fooling?) Or, get an attorney to reveiw the LOI and send him a letter. Again, he needs to understand you are not going to roll over and play dead.

Sep 24, 2011

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