Earnest money in limbo after buyers back out
Q. My husband and I sold our home and were scheduled to close the sale a few weeks ago. Two days before the closing, we found out the buyers were getting a divorce and they didn't want to buy the house anymore. Needless to say, the closing never happened.
Our attorney wrote a letter to the buyer's attorney demanding they turn over the earnest money deposit of $5,000 to us. According to our attorney, they had no legal right to cancel the contract.
The buyer's attorney has responded telling us he does not have the authorization to release the earnest money deposit to us. We have gone to our Realtor, the listing agent, but he tells us the company will not release the deposit to us without either a written agreement signed by both buyer and seller or a court order. Meanwhile, we have moved out of the house but continue to incur expenses for our mortgage, real estate taxes and insurance. Plus, we're both scared to death leaving an empty house.
Now what? Our attorney told us he does not go to court and he referred us to another attorney who wants $2,000 plus the filing fees. Seems ridiculous to spend $2,000 in a $5,000 dispute. Do we have any other options you could suggest?
A. You have a couple other options. One would be to negotiate with the buyers. They know they will probably never see their $5,000 again, so anything they can retain from their deposit is a bonus. Offer them $1,000 and see what they say. If they agree, you lose the $1,000 but you are relieved of having to deal with this anymore.
If that doesn't fly, you are probably stuck with a lawsuit. However, frankly, you could probably handle this on your own. You would need to prepare and file a complaint and summons and have the buyers served. None of this would be terribly difficult. My guess is once you obtained service on the buyers, this case would probably be resolved quickly. They certainly won't want to spend any more money on this, which they would be required to do to defend the case.
Of course, obtaining a judgment against the buyer may be the easiest part of this. Are they still local? Can you locate one or both of them? Do they have jobs? These are important factors to consider in the event you decide to pursue them legally.
One other fact to point out is that most form contracts contain a provision that provides that the losing party pay the costs and attorneys fees of the prevailing party in the event of a lawsuit involving the contract. This would be something to point out in your negotiation with the buyers. Again, though, this provision would only be of benefit to you if the judgment is collectible.
Q. I know you have written about this before, but how do I go about getting my tax bill reduced?
A. I've written about this a few times. However, it is that time of year. Remember, you do not petition to have your tax bill reduced. You petition to reduce your assessed valuation, which is a major component of your tax bill.
The tax bills coming out now are for tax year 2015. Probably not much you can do about these current bills. However, 2016 assessed valuations have been and will continue to come out over the next few months. These valuations will impact your 2016 tax bill, payable in 2017.
You generally have 30 days to contest your 2016 assessed valuation. If you have not yet received the notice of assessed valuation, call your township assessor and ask when the valuations will be coming out. If you have received the valuation notice, speak to your township assessor to determine if you may still file a complaint contesting the valuation.
The process for filing a complaint is not difficult and the counties are pretty good about offering advice on their websites. There are also firms that will contest your assessed valuation for a fee, usually a percentage of your first year tax savings.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.