What to do if the seller won’t return your earnest money deposit. Episode #227
Hello! Welcome to Todd Miller TV. The subject today is “What to do if the seller won’t release you earnest money deposit.” Example, you go under contract to buy a house and one of the first thing you do is write a check for earnest money, usually a couple grand or maybe 1% of the purchase price, some amount, nominal amount. And the idea of it is to the seller knows you’re serious, and that you have some skin in the game, that way you can’t tie the house of under contract for a month and walk-away and you know, just, he didn’t have the chance to market with somebody else. So you have the earnest money, I guess deposited in Escrow, or depending on your State and attorney’s office whatever. But there are 3rd party. So what happens is let’ say you get down to the end of the transaction and maybe you changed your mind or maybe you can’t get a loan or maybe you don’t like the inspection, who knows what the deal is! And then you say “Hey, I want out of the deal, give me back my earnest money.” Well, just you say you want your money you don’t get it automatically. The seller has to agree, your agent can’t get it for you. The other agent can’t get it for you. No one can get it for you. It has to be mutual agreement between y and the seller. Some of the sellers are saying “Hey no, they backed out the last minute.”And sometimes, buyers are right to do it. Maybe they/something wasn’t disclosed, and then they found out and they go back to the seller, or they couldn’t get a loan. They just got the end of the process couldn’t qualify and maybe they don’t have contingencies anymore you know, and the seller says “Well it took you too long so I’m gonna keep the EMD. They can’t just keep it! It’s a 3rd
, mediator agreement usually.” And a lot of times when you get face to face you’ll realize you can negotiate it out. So that’s another option. Well a lot of people I know says “I wanna get my attorney involved.” And that’s great. Attorneys would like to take those cases all day long because they can bill the hell out of you. The problem is that if it’s a thousand dollars, your attorney’s gonna cost you that for a couple of hours maybe. So depending on what attorney you get. So you’re really not gaining anything. Not only that, lots of times the attorney can’t do anything . The attorney can’t just get your/magically make it happen. Seller s has to agree. So if ll you now, you have to go court or something. The seller will show up with the agreement he’ll “wait. We have to mediate this first and then the judges will say “Did you mediate” “No!” “Go back to mediation. So your really option are to negotiate it out with the seller. If that doesn’t work, try mediation , and if that doesn’t work, then you can go through some of court system or whatever. Most people just say “Forget it, Leave it, it’s a thousand bucks. “ And then usually a couple years later, if you go back you can claim it because nobody’s claim that in a certain amount of time. Sometimes you can go back after a year and go “Hey, that’s my money. I’ve never.” It’s sitting there in a trust account, It’s mine, and you can get it. So, anyway I thought I would share that with you. EMD disputes are very common now. We see a lot of them since probably 30% of all transactions fall out at some point. And a lot of times the sellers are angry that the buyer’s backed out or couldn’t get a loan or whatever so they’re keeping them. And I get that question a lot. Those are just some tips, you know depending on where you are, the law maybe different, these are all Real Estate specific, actual things that we deal with. So anyway, I just I thought I’d share the Earnest Money Deposit dispute and my thoughts about it with you. And that is my update for today and hope to see you on another video. Thanks.