Texas Real Estate Mediation - Earnest Money Dispute

Real Estate Agent with Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com 0480809

Mediation is a mandatory clause in the Texas Real Estate Contracts that are promulgated by the state of Texas. This means, a judge doesn't want to see a real estate transaction in his courtroom unless the parties have tried Real Estate Mediation Services first.

texas real estate mediation services - donna harrisMany issues within a real estate transaction can be mediated. For example, earnest money disputes. Earnest money is typically given to the title company to hold upon execution of the contract. The amount of earnest money is negotiable. It could be $500 or it could be $10,000 or more. It mainly depends on the price point. In my immediate market, approximately 1% of the contract price is becoming more of the norm.

Typical scenario: Buyer gives earnest money. Buyer has many ways out of the contract. Buyer takes one of the ways out, and claims earnest money. Seller moves on.

Mediation scenario: Buyer gives earnest money. Buyer has many ways out of the contract but allows all dates to expire. Buyer decides to terminate the contract outside any contract dates of contingencies. Buyer claims earnest money. Seller wants to claim earnest money. How do these parties move on when they both want the same thing?

Their agents cannot interpret the contract, and more brokers will say "lawyer up".  My Texas Real Estate Mediation Services can help both parties figure out a mutually agreeable way to move forward.  Contact me today for your free 10 minute consultation to see if Mediation is right for you.

Check out my website to see other examples of Texas Real Estate Mediation Services scenarios.


Donna Harris



Comments (2)

Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

In CA it is often 3% held by title company.  The dispute occurs when the only strong buyer changes his mind and seller had plans to assume the deal will go through.  I had this problem last summer when parts of the Bay inland was 103 deg F and coast 30 miles away was 30 some deg cooler. We had mediation setup and all lawyers would get together setting up for Sept.  In August the seller/relator returned the deposit.

Jul 15, 2017 02:15 PM
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

3%? WOW! Texas people are short on cash and have a LOT of debt. Many pepole can't even come up with 3% for the downpayment, there is no way they could do 3% earnest money.

Jul 17, 2017 10:31 AM