That's My Clients EMD!!!!!!

By
Real Estate Agent with GoHomeConnect.com Realty

Why do agents try to hold on to EMD's that they know rightfully should go back to the buyer???? Go to fullsize imageMy client put an offer on home with a 7 day inspection contingency. Needless to say my buyer was dissatisfied with the inspection, this was expressed to the listing agent. The seller (s) said they will make no repairs or adjust the sales price of the home! OK now my client has the right to her full EMD back, right? Right!!! So why did I receive an email from the listing agent stating if my client does not want to go through with the transaction they will need a mutual release with the EMD going to the Seller. WTH!!!

Go to fullsize image

My response:

 

"I will contact my client to see if she still wants to proceed, but why would the Seller keep the EMD? We did the inspection in the time allotted, notified the seller of the dissatisfaction with the inspection and we did not sign the contingency release for the inspection. My client if she chooses not to go through with the purchase legally has the right to declare the contract null and void and have her EMD returned to her.  Hopefully we can make this a win-win situation for everyone and close this transaction."

These types of situations in RE can be soooo infuriating. Pleeeease give me your take on why some listing agents behave this way? I did however speak with my client yesterday evening and she has decided to purchase the home, but it does not make this situation any less frustrating especially when I know this is something that can very well happen in the future. By the way I am in Michigan, I know laws are different in other states.

 

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Michigan Oakland County Southfield
Tags:
emd earnest money deposit

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Rainmaker
501,394
Sonja Patterson
Keller Williams - BV - College Station, TX
Texas Monthly 5-Star Realtor Recipient for the Hou

She should get her EM back!!  The other agent is just trying to push you IMO.  You might call your state real estate agency to see what their lawyers would recommend.  Good luck!! 

Sep 10, 2009 02:14 AM #1
Rainer
9,771
Keena Frye
GoHomeConnect.com Realty - Southfield, MI
CPDE

IMO??? We'll my client decided to purchase so I won't need to do this. It's just unfortunate that we can't be honest and work together.

Sep 10, 2009 02:22 AM #2
Ambassador
1,894,169
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

I don't know about the contract in your state but in ours there is an option to void the contract if the parties can't come to an agreement regarding the home inspection repairs.  Is your client now purchasing the home because they feel pressured because the seller didn't sign the release?  Sounds like a reciepe for disaster if they are.

Sep 10, 2009 02:22 AM #3
Rainer
9,771
Keena Frye
GoHomeConnect.com Realty - Southfield, MI
CPDE

In Michigan you have to have mutual consent to release the EMD or the parties will have to go through arbitration or the court system depending on how the contract was written. There are some others tactics to release it if you are the one holding it, but mainly its mutual consent.

Cindy- No, my client really does want the house but had some concerns or cold feet. I am working in the best interest of my client, she is actually getting an awesome deal for this home.

Sep 10, 2009 02:43 AM #4
Rainmaker
110,794
Greg Saffell
Tucson, AZ
Real Estate Professional Tucson, Oro Valley AZ

Keena, A interesting story, and with a happy ending. I really don't understand why both parties need to agree to return the EMD if the buyer meets his/her obligations regarding the inspection. This sounds like automatic litigation to me. I'm sure glad it's not written like that in our state. We have our share of problems without that too.

Sep 10, 2009 03:24 AM #5
Rainmaker
330,523
Rosalinda Morgan
Brookville, NY
"The Rose Lady"

Keena - In New York, if the offer is subject to inspection, the buyer can get the EMD back. 

Sep 10, 2009 07:27 AM #6
Anonymous
Joe Farsetta

Dont feel bad, folks...   The EMD will likely be returned. But, different customs rule the day in different parts of the country.   For instance, in my part of NY, lawyers almost NEVER accept any sort of contract which is contingent on the inspection. This means that there is no contract to bind the parties. So, a buyer has an accepted offer and schedules the inspection. The inspection is performed and everything moves forward... sort of.   What often happened when the market got hot was that the home continued to show until the contracts were fully executed by both parties. So, if a better offer came along ("The home was just inspected and it passed with flying colors..."), the buyer lost the deal to the higher offer.   All's fair you say? Well consider this: the first buyer is out the money they invested in the inspection, and anything else they may have had to pay for up front (appraisal, application, whatever...).   The Seller never offers to make the buyer whole, even though they technically sold the home for more. 

Oct 02, 2009 12:08 PM #7
Anonymous
DJS

I put an offer in on a house and was accepted.  I thought we had approval of a mortgage and proceeded put  money to down to confirm our offer.  In the coming days as mortgage details were being finished found out we were going to be denied.  the mortgage did not get approved.  The money was contigent on getting approved.  I know the it is consider EMD and want to get it back.  What are my options?

Dec 16, 2009 01:29 AM #8
Rainer
9,771
Keena Frye
GoHomeConnect.com Realty - Southfield, MI
CPDE

DJS

This actually depends on what state you are in. I am an agent in Michigan and in Michigan if the offer was contingent upon financing and you are still within the contingency period, you would need a denial letter from the lender to give to the listing agent. At this point once (under normal circumstances) the listing agent receives the denial letter and a mutual release would have to take place, meaning all parties would have to agree who to release the EMD funds to. Did you have a real estate agent? If so, your agent would send over the mutual release with the denial letter. I hope this helps.

Dec 16, 2009 02:12 AM #9
Rainer
6,621
Harold Thomas
Thomas-Chambers Company - Alameda, CA

That's ridiclous. Some of these agents these days never cease to amaze me. Was there any reasoning as to why the seller was to keep the deposit?

Dec 01, 2015 07:36 AM #10
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Keena Frye

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