Getting That Earnest Money Back When The Deal Falls Apart

Reblogger Cory Barbee
Real Estate Broker/Owner

Here is a great post by:

Gary Woltal - Assoc. Broker REALTOR® SFR Dallas Ft. Worth

Flower Mound, TX

More about me…

Keller Williams Realty

Address: 2611 Cross Timbers Rd, Suite 100, Flower Mound, TX, 75028

Office Phone: (972) 874-1905

Cell Phone: (972) 310-8858

If you are looking to buy or sell real estate in the area of Flower Mound, Tx contact Gary Woltal at the information above and he will take great care of you!!

Original content by Gary Woltal 0575737

Deposit MoneyI have always told clients contracts are the rules of the game when things go wrong. I wish more agents could grasp that.

How Do You Get Earnest Money When The Deal Falls Apart?

Money put up as skin in the game for the buyer to show good faith. Often $500, $1,000, $2,000.

There is the contract and then there is the real world. Many buyers easily get the money back with failed inspections or they cannot secure financing.



Sellers pull their hair out with buyers walking at the table and NOT wanting to forfeit what the contract says - the deposit money.

What recourse do Sellers have?

  • Consult a real estate attorney and pursue getting the funds that way. Even THREATEN doing this works some times. In being practical, the attorney's fees are much higher than the deposit, so how can this work?
  • Call the Broker/Owner of the agency and request why will the agent and buyer NOT follow the contract? Pressure by the Broker. My luck has been the stubborn agent IS ALSO the Broker/Owner! Sigh
  • Request MORE funds up front on a home to let them know this limbo money they are fixing to lose is huge so they need to be serious as a potential buyer of the home
  • A recommended by attorneys compromise is agree to SPLIT the earnest money being refunded. Sure as a seller your house was off the market but at least you get something out of it
  • Definitely file a complaint if with the local board of REALTORS of the buying agent that you feel they are not following the rules of the contract and complying with it
  • If no deal is agreed to for release of funds in many states the money goes escheat to an unclaimed funds pool. No one gets the money. This follows a big waste of time for that transaction.

Life is not perfect with earnest money and the real world often turns out very different than what the contract specifies. But you live and learn and when deals fall apart for various reasons, money drives some people crazy, emotions flare, and true colors show that have NOTHING to do with a business deal. Do your best but sometimes that money deposited in escrow sometimes feels more like Monopoly money than really a promise of good faith that it is supposed to be.


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
California San Diego County San Diego
getting that earnest money back when the deal falls apart

Spam prevention
Show All Comments
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

When I have the listing, we try to get non-refundable earnest money....and usually the same holds true on the buyer's end, if they are serious. 

Aug 24, 2011 09:50 AM #1
Kwee Huset
Kwee Huset Realty - Venice, FL
Venice Florida Homes For Sale

Good morning Cory,  When I help buyer to write a contract, I will have it within 1-7 days of excuted contract for the initial escrow deposit into the escrow account.

Aug 25, 2011 02:40 AM #2
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Cory Barbee

Broker (760) 563-4022
Ask me a question
Spam prevention

Additional Information