This edition of my Metro Detroit real estate talk I want to answer a question somebody asked me "What is a mutual release". Mutual release pertains to the earnest money a buyer puts down when buying a piece of Metro Detroit real estate. It doesn't matter whether you are buying a foreclosed home in Canton MI or a lakefront home for sale in Oakland County Michigan you will be putting down a deposit (earnest money) when you sign the purchase agreement.
The only two ways the buyer can get out of a purchase agreement in Michigan is via the "inspection clause" or "mortgege clause". Over the years brokers and real estate agents have found themselves in legal trouble by releasing the earnest money when the issues where not settled. So the question of "what is a mutual release?" is answered this way. It is a legal document that your real estate agent will have you sign to release the earnest money. This earnest money release must be signed by both the seller and the buyer. Both the buyer and seller must agree to release the earnest money a certain way. The earnest money release will specifically state who is to recieve the earnest money, or how it is to be split. Then the buyer and seller will sign it.
I hope this explains "What is a mutual release?" Here is an example of what a mutual release may look like.
their obligations arising by virtue of the receipt of said earnest money or Note
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