-
Quick Tour
Connect. Share. Learn.Welcome to ActiveRain, the #1 social community for real estate professionals.- Explore the world's largest storehouse of real estate knowledge
- Access free training on ActiveRain University
- Share the experience of life in the real estate industry
- Grow your business through real estate blogging
- Blogs
-
Resources
Product Reviews Curious as to what others in your profession think about a certain product or tool? AR's community takes the time to leave honest and transparent reviews of their experiences so you can be a bit wiser about your purchase.
- Broken down by categories and subcategories for easy finds
- Get an unfiltered look at what real users are saying
- Leave a review yourself for others to benefit from
- Add new products as you use them and gain points for doing so
|
Not all short sales work out, we agents know that. However, it agitates me and the buyer greatly when the listing agent will not make it a priority to get the earnest deposit release signed. I am writing this post in 
Posted by 
;)
;)
;)
Find AL real estate agents and Orange Beach real estate on ActiveRain.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
© 2013 ActiveRain Corp. All Rights Reserved
25 Comments on Come on, Fellow Agents - Let's be Professional About Earnest Money Releases
I've had to threaten agents with contacting the Board of REALTORS in my county and lodging a formal complaint before the money was released!
I'm so glad Charita re-blogged this! As long as it's not a question of legalities and simply a question of signatures, you're right -- get it signed and lets all move on!
This is a great discussion. It is important not only to get the paperwork done, but done right. When you are dealing in the short sale or foreclosure market, it could be hard to get the money back.
I agree. If the deal is not going to move forward, get the release signed as soon as possible to everyone can move on.
Hi Lance. I have seen it from the other side...
As a listing agent, I can't make my sellers sign the agreement. I would love them too, but some don't want to. And we do represent them...
I fully understand the way you feel, however...
Ken
Yowza.
If that happened in New York we'd have one hell of a lawsuit. Of course, lawyers hold deposits here, not brokers.
Very frustrating. In Ohio, a Broker can only release earnest money in one of two ways. Either with a mutual release signed by both the buyer and seller, or by a court order. Our hands are tied. Our purchase agreements state as such, and I try to emphasize this portion of the PA with both my buyers and my sellers.
I hope by the time you read this you will have your signed release and the check is in the mail to your buyers!
In my area, the EMD isn't even deposited until the bank approves the short sale. No release necessary if the short sale doesn't work out.
I appreciate everyone's comments. This case for me was where the seller's lender did not approve the buyer's offer. It is very clear cut in that case, the listing agent should make it a priority to get the release signed ASAP.
Lance,
Most of our deals go through, only a handful of short sales in the entire Province of Ontario.
But, if the money is to go back, make it a priority and get it done. Everyone will appreciate that.
Brian
Rules here in PA are the same as in your state. We cannot release funds until both parties agree in writing.
In California, buyer and seller must agree to a release of the deposit. HOWEVER, “A Buyer or Seller may be subject to a civil penalty of up to $1,000 for refusal to sign such instructions if no good faith dispute exists as to who is entitled to the deposited funds.” This is a quote from our standard purchase contract and it is part of the California Civil Code.
If there is a dispute of the legitimacy of the cancellation, let’s settle the dispute. If there is no dispute, hanging onto the buyer’s deposit money is an action of a small person and agents should discourage such activity by their clients.
In Arizona the EM release is unilateral. No contract, no deal. Otherwise I would imagine all the sellers lining up to get their hands on it.
We don't open escrow without a contract signed by the sellers BANK, with complete approval accomplished. Until everything is completely signed, it is an offer, not a contract.
I've been on both sides of this situation as well Lance. And yes, it is darned frustrating when personal grudges get in the way of the listing agent and/or the seller getting the release signed in a timely manner. If the contract allows for the buyer to walk, whether it be for inspection results, appraisal, loan approval, short sale approval, etc., then the escrow release MUST be signed! If the seller wants to try and hold onto money that isn't theirs to take, then they should put a non-refundable escrow clause in the contract. (Let's see how many buyers would line up for that one).
I always tell my sellers that we have multiple hurdles to jump in any contract before it's a DONE DEAL....and everything listed above is what I discuss. Generally, a good agent will explain all of this to a seller and get the release signed. It seems that you are dealing with an agent who may have a difficult seller and possibly is fanning the flames of the seller's frustrations over a fallen deal.
Good luck and hope you get that release soon!
I've had similar issues here in Florida, Lance. We do have a procedure where we can notify the listing broker that we will release the money after xxxx days if they don't respond otherwise, should they not respond to our original requests.
Lance, unfortunately it's not just short sales. I had one last year that went from October of the year before to the following August. Nearly a year. I had to squeeze the guy's broker to get the money back. Oy!
Lance, this is not always a listing agent's fault. Many times the LA has difficulty communicating with the client as the seller may be upset the deal has fallen apart. As a buyer's agent, we must advise this can be an issue and deposit money can be held for an extended period of time until mutual consent or a court order (in PA, it became such a problem that the commission created a law that states if a deposit is held for more than 1 year without court action or continuous response from the seller, the buyer gets the money back by requesting it in writing - I summarized this). As a listing agent, we also must advise that deals can fall through and advise the seller obtain an attorney should they feel entitled to any deposit money. In a short sale, a buyer should not put a large deposit for the reason that sellers may not be very motivated to do much of anything during the process (let alone sign back deposit money). I will say this - it is aggravating as well that so many buyers have an "easy out" and bail on deals. The fact that there is a contract means very little anymore, so i can understand both sides to this. A buyer can alsways file legal action against the property and hold up any future sale, which should deter other buyers and title companies from insuring it.
Lance, check the laws in your state for holding funds in escrow. There may be other options for getting the money back if the seller won't sign.
Lance I wrote a similar post on this topic of release of earnest money and WHILE it is the buyer and seller who have signatures unfortunately some agents steer their clients the wrong way in holding back the money. EVERYONE should just follow the letter of the contract. Unfortunately this does not happen always. A split is a compromise even though it is truly unfair.
Hello Lance,
I see it from both side. The Listing side and the Buyers side. As a listing agent we try our darnedest to sell the property, but if it doesn't sell we move forward. From the Buyers end. If the deal isn't going to move forward. Seller...Sign the EMD and move forward.