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Earnest deposit issue

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Joined: 16 Jan 2012
Posts: 1

PostPosted: Mon Jan 16, 2012 5:22 pm    Post subject: Earnest deposit issue Reply with quote

Would appreciate if sifus can provide info on the following matter:-

I, as the seller of my property, signed the offer to purchase with the buyer & the buyer had paid the 3% earnest deposit to the sale agent. There is a special clause written that "If loan not approved, the vendor shall refund the earnest deposit."

The buyer has taken more than 14 working days to apply his bank loan, & we allowed him more times for that. On the 20th day, he wanted to cancel the deal because he only able to obtain max. 60% loan amount, & he not able to come out the remaining amount.

I have contacted my agent and wish to forfeit his earnest deposit, but my agent keep saying that I not entitled to forfeit it and even I do so, I will definitely lose if bring to the court.

My arguement are:
a) the buyer loan is not rejected by the bank, cause the banker still offer him 60%, only himself not able to come out the balance. In addition, the buyer if not willing to buy the property after signing the offer to purchase, could cheat & simply apply bank loan @ only submit insufficient docs in order to make his loan application failed.

b) The buyer should 1st ensure his financial ability, market price & the amount of loan he can borrowed before signing the offer to purchase. If everyone also said bank not approve, then what else protection to the vendor??

Am I entitled legally to forfeit his earnest deposit in this case?? What are the formal procedures to do so??
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