I have a listing on which there was an accepted purchase contract.

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An inspection was done and the buyers asked the seller to make some repairs. The buyers have notified the seller that they are not going through with the contract and submitted a release requesting their earnest money.

The seller is also demanding the earnest money and therefore refuses to sign the release. He has instructed me to put the property back on the market.

Can a seller accept another offer if there is still a dispute going on with a previous buyer over earnest money? Whenever it is clear that a transaction is not going to close the best case scenario is usually for the parties to resolve their contractual obligations so they can each move forward and not worry about lingering liability to the other party.

This is usually accomplished by signing a mutual release that also addresses how the earnest money will be disbursed.

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Even though no release is signed, a seller in this situation can certainly place his property back on the market. In fact, if the seller wants to pursue a breach of contract action against the buyer, it will be important that he be able to demonstrate that he attempted to mitigate his damages by trying to find another buyer for the property on the same or better terms.

Often REALTORS in this situation will make the second contract contingent on the first purchase contract being released. However in some instances such a release cannot be negotiated. In that case there is nothing in Ohio law that prohibits a seller from proceeding with a subsequent purchase contract with another buyer.

Without a release the only risk the seller runs is that the first buyers will change their minds and try to enforce their purchase contract. In the scenario posed in this question, however, that seems unlikely since the buyers indicated that they are exercising their right under the inspection provision to terminate the purchase contract.

Earnest Money Agreement - For Sale by Owner

And of course that possibility will be even more unlikely once the purchase contract has expired. Even though the possibility that the buyers in this scenario will change their mind and decide to purchase the property may be small, in other fact situations it may be less clear.

As most REALTORS have experienced firsthand, buyers and sellers frequently change their minds and sometimes act in a manner that is difficult to predict.

For this reason, REALTORS, should never advise their client as to the potential liability of moving forward with a new contract without being released from a previous contract.

Doing so could expose the REALTOR to potential liability if their advice proves to be wrong and a possible allegation that they engaged in the unauthorized practice of law. Instead REALTORS should always recommend that their clients consult with legal counsel in this situation.

Legally speaking: Does an earnest money dispute preclude a new contract? | Ohio Association of Realtors

Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney. Does an earnest money dispute preclude a new contract? Blog Home Blog Archives OAR Home.