The Louisiana Residential Agreement to Buy or Sell includes a section regarding the DEPOSIT when Purchasing a Lake Charles Home.
If the deposit is to be considered “earnest money” this language will need to be specified as such. The current language regarding DEPOSIT automatically becomes what is referred to as “specific performance” Specific performance allows for Seller to recoup 10% of the purchase price in damages if a Buyer defaults.
If the deposit is to be treated as Earnest Money, a Seller would only be entitled to retain the amount of the Earnest Money in damages if Buyer defaults, therefore Specific performance is better than Earnest money as far as protecting the Seller in the Contract.
The Louisiana Residential Agreement to Buy or Sell contains the following language pertaining to the Deposit
“Failure to deliver the Deposit shall be considered a default of this Agreement. If the Deposit is held by a Broker, it must be held in accordance with the rules of the Louisiana Real Estate Commission in a federally insured banking or saving and loan institution without responsibility on the Part of the Broker in the case of failure or suspension of such institution. In the event the parties fail to execute an Act of Sale by the date specified herein, and/or a dispute arises as to ownership of, or entitlement to, the Deposit or funds held in escrow, the Broker shall abide by the Rules and Regulations set forth by the Louisiana Real Estate Commission .”
RETURN OF THE DEPOSIT: The Deposit shall be returned to the BUYER and this Agreement declared null and void without demand in consequence of the following events:
- If this Agreement is declared null and void by BUYER during the inspection and due diligence period as set forth in lines 174-191 of this Agreement.
- If this Agreement is subject to BUYER’S ability to obtain a loan and the loan is not obtained except as stated in Lines 85-86 of this Agreement but only if the BUYER has made timely application for the loan and made good faith efforts to obtain the loan.
- If the BUYER conditions the Sale Price on an appraisal and the appraisal is less than the Sales Price and the SELLER will not reduce the Sales Price as set forth in Lines 100-107 of this Agreement.
- If the BUYER timely terminates the Agreement after having received the leases or assessments as set forth in Lines 143-147 of this Agreement
- If the SELLER is unable to timely deliver to the BUYER an approved sewerage and/or water inspection report as set forth in lines 193-200.
Copyright 2014© Marilyn Boudreaux
Marilyn Boudreaux, REALTOR® 337-499-9592
Century 21 Mike D. Bono & Co.’s
4410 Nelson Road
Lake Charles, LA USA 70605