How do I get my earnest money back?

Question

I was under contract to buy a MLS house in St. Louis, MO but the deal fell through because I was unable to obtain financing.  There was a clause in the contract that stated if I was unable to get financing, the deal is scrapped and I will get my $1000 earnest money back.

I was preapproved for the loan but after further review, the loan company decided I took too many deductions in my 2004 taxes and used that against me.  I faxed the denial letter from the mortgage broker before the deadline on the contract.  The sellers agent claims that I should have known I would not qualify for the loan which is completely untrue.

But the sellers agent and sellers of the house still has not signed for the release of my earnest money.  How do I get it back?  Do I take him to small claims court?

Please help!

Josh Green · Answer

hahahaha, talk about going through the archives!

Jon Holdman · Answer

Guys, the original post here is three and a half years old.  Pretty sure the OP either got his money back or its too late.

Ned Carey · Answer

The broker will generally be more reasonable than many agents. Some agents are real boneheads but the broker doesn't want to put his license at risk. The broker is also likely the one actually holding and responsible for the deposit.

John Disusa · Answer

The first answer to your question is correct (see above.)
            But why are you asking here and not your Realtor? You are a buyer, it doesn't cost you anything to have a Realtor working for you, so you have one, right?
            If not, this is a good example why anybody buying real estate should have a professional working for you. There will be much more complicated questions and problems down the road, so it's just silly not to have a Realtor, especially if it doesn't cost you anything!

Dick Green · Answer

I'm not sure about the law in your state but in Texas your earnest money should still be in escrow awaiting the completion of the transaction.   The good news is that the sellers can't get the money either, unless you sign an earnest money release with them as the benifituary. The bad news is that they could switch title companies when they have a new buyer leaving your money in limbo.  What I would do is to Invite everybody to a small claims law suit party.  The seller's, the seller's agent, the mortgage broker, and my agent.  But first I would threaten in writing via certified letter of my intentions allowing a reasonable time period (2 days) for reply then forward my complaints and documentation to each of the parties regulator commission along with the Attorney General of you peticular state.  They can't keep your money. $1,000 bucks is a lot of money!

live long and prosper!