In a perfect world, your Florida real estate transaction will be a smooth and worry free process. The buyer and the seller agree to a purchase price, contracts are signed, inspections occur, financing is acquired and the transaction closes and the property is transferred from one party to another. Unfortunately, real estate transactions are rarely hiccup free. Often times, various issues will arise during the sale in which it would be helpful to have the advice of a qualified real estate attorney. Binder disputes are one of the items that can occur during real estate transactions.
What is a Binder
A binder is another word for the escrow, or the funds that the buyer submits to the seller as part of the offer. The binder or escrow funds are the buyer's way of showing that they are serious about finalizing the purchase of the home. If the buyer backs out of the purchase of the home for a reason other than what is allowable under the contract, the seller may keep the buyer's binder. This is a way the seller may mitigate the damages they incurred by taking the home off the market and relying on the buyer's promise that they were going to purchase the home.
What Normally Happens in a Florida Real Estate Transaction
When a seller accepts a buyer's offer, the binder is held by a third party, typically the title agency or the broker. When the purchase finalizes, the binder is applied as part of the total down payment that the buyer will provide to the seller as part of the purchase. If the buyer declines to follow through and purchase the home for some reason, other than what is allowed under the contract, the seller keeps the binder. If the buyer withdraws from the transaction for an allowable reason, such as the parties aren't able to come to an agreement on concessions after the inspection or if the buyer is unable to obtain financing, then the seller signs a binder release and the funds are returned to the buyer.
What Happens when there is a Binder Dispute
In some transactions, the buyer and the seller may disagree about whether or not the buyer has withdrawn from the purchase for an allowable reason. In these cases, the seller will refuse to sign the binder release and release the escrow funds back to the buyer. This is called a binder dispute and they can potentially be complicated and drawn out processes, especially when the buyer is counting on the release of those funds so that they can move forward with the purchase of a different property.
How a Florida Real Estate Attorney Can Help
In the event of a binder dispute, a qualified Florida real estate attorney can discuss the many options you may have to recover or keep the escrow or binder. As a buyer, you may have arbitration, mediation or interpleader options available to you. As a seller, you may need legal representations to defend these actions by the buyer. Contact the Law Offices of Justin McMurray, P.A. for a free consultation regarding your binder dispute today.