How does mediation work for EMD disputes? How much does it cost?

[Neel P.]

I was under contract on a duplex and the financing fell through. 

Its within the 45 day Loan Termination Deadline period, and the sellers agent was made aware.

Long story short - the seller didn't sign an extension for the contract date, so the real estate contract is now "expired". The Seller is claiming the EMD ($3,400) is now his, and won't sign the Notice of Cancellation to release the EMD back to me.

I told the Sellers Agent that I am willing to split this 50/50 just to not deal with this, but the Seller is bitter and won't agree. 

From research, it sounds like this needs to go to mediation now

- How does this work? Who organizes the mediator? Is it via the Escrow company who is holding the money?

- How much does this normally cost? The property is in Missouri.

- I have a lawyer who can send a demand letter and prove that I am in the right here....but who does that go to? The Seller, the Escrow company, or other?

I have a feeling that if I scare the seller with a lawyer letter, he'll agree to release the EMD or go 50/50 with me so we can move on. I'm just not sure on the process here.

Thank you!

[Joe Splitrock]

I would stop offering 50/50 split immediately and demand full payment plus damages. Even if you are willing to split during mediation, don't offer that now. It is playing poker and showing your hand. Tell them the 50/50 offer is off the table and you are now getting your attorney involved, so you want attorney fees. 

Assuming you properly notified the sellers agent and have proof from your lender that financing fell through with a financing contingency in place, you are entitled to return of EMD. I would personally accept nothing less than the full amount.

Your realtor should be able to facilitate mediation. Whenever I have had disputes, my agent has been able to negotiate with the sellers agent. Again, take the offer off the table and let them know with your attorney involved, you will expect full return plus attorney fees. Hopefully being faced with a larger bill, they come back and say "ok we will do 50/50". This is my favorite move in negotiation, going backwards. 

I would also check the legality of the seller placing their property back on the market without resolving EMD with you. Sometimes that "locks" the property until resolution. Ask your real estate agent or attorney.