Question: I have a buyer and seller who failed to close on the closing date. Does that mean the contract is null and void?
A closing date on a contract is not an expiration date. Therefore, if the parties don’t close on the closing date, the contract still exists. The issues then become why the contract failed to close and whether either (or both) parties breached the agreement.
If money is to be forfeited to the Seller for a breach of contract by the Buyer, you will want to figure out the potential monetary damages caused to the Seller for having their property off the market while under contract. At that point, you can deduce the appropriate amount to claim. For example: the Seller had a $1,800 mortgage payment and $300 in utilities expended during a 30-day period. And, let’s say the Buyer fully breached the contract and placed a $5,000 deposit that is being held in an escrow account. An appropriate amount to claim may be $2,100 for the 30-day period that the property was off the market. You will find that providing something back to the Buyer may assist in achieving an executed Release and Cancellation of Contract within a relatively short time frame.
Although the above has been simplified, you can use it as a guideline for potential escrow disputes.