Seller refuses to sign a mutual release

Reader question: We signed a contract on a home. In reviewing disclosures, everything seemed OK. We found out a week later that the city water and sewer was confirmed to run under the house and through the middle of the back yard and also services three properties to the south. We also learned the water meter in the garage needed repairs in years past and the property owner paid the bill. We backed out of the contract. Now, the seller refuses to sign a mutual release, and their lawyer sent a response they expect to close. They won’t return the $15,000 earnest money. Our agent wants nothing to do with it. None of these issues were disclosed. We also want to help other buyers to understand there is a risk and find out how not to lose their earnest money. Can you help?

Monty’s answer: If it is verified the seller did not disclose these items that you have uncovered, an attorney

can evaluate the likelihood to recover all or part of your deposit. At this point, seeking a legal opinion to learn your options for recovery is the best course of action. Consider the following steps

Read your offer to purchase to see if your state includes an earnest money process in the document. If the language is present, you will learn how the state handles earnest money disputes. This information will help you in future conversations.

Put a package together to deliver to your attorney:

• Contract documents including the seller condition report and agency disclosures. • A copy of a city engineering map that demonstrates the location of the utilities.

• Copies of the records of multiple repairs paid by the owner. Lacking the ability to obtain physical copies of the repair data, the name and contact information of the person who provided you with this information.

• Any notes you took, recollections of conversations, or emails between you and the agent.