The usual hotline answer to listing agents when a deal fails and the parties have not yet signed the SCR518 release:
Tell seller, "In my experience as a REALTOR®, once the release is signed then everyone moves forward cleanly without legal entanglements. So self-settlement or mediator assisted self-settlement of the earnest money on the release is the cheapest, quickest, safest option. Without a signed release, my REALTOR® ethics require me to recommend that you obtain legal counsel asap about the earnest money, any potential legal remedies against the buyers, re-marketing the property, going under a future contract, and risks from buyer #1."
A future contract can even be made contingent upon the first contract being unenforceable and no legal actions resulting from that contract with a sole exception for a legal action on earnest money.
Sellers should always consider using due diligence SCR311 to get paid when deals fail and to help avoid earnest money disputes and to help avoid lawsuits.
Sellers make the decisions and shoulder the risks about re-marketing and re-selling the property.
If the sellers decide to sue the buyers for breach of contract, buyers want sellers to effectively re-market and re-sell the property asap because this can limit the amount of money that the buyers owe the sellers in a judgment. Remember that SCR310 allows the prevailing party in a lawsuit to ask for the judge to award attorney fees. So, even a small damages amount can be added to significant legal fees. So, self-settlement or mediator assisted self-settlement is always a consideration.
Posted by : Byron King on 11/08/18 (This information is only accurate as of 11/08/18. You must contact SCR for updates and changes to this information after 11/08/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)