Regarding Earnest Money

[Saijad Dhuka]

We recently had a commercial property under contract in Texas and had an option period of 21 days. On the 21st day, we decided not to pursue the purchase further due to some unexamined concerns and informed our Realtor to notify the Sellers' Realtor regarding terminating the contract or getting an extension. But our Realtor failed to notify the seller that same day and waited till the next day. When he notified the seller's agent the next day (one day past the option period), he replied that they would not extend the contract and also keep the earnest money.

We need some advice on what our options are here to recover the earnest money? Should our realtor be held accountable since he didn’t notify the seller on time and also didn’t let us know that he wouldn’t be able to notify the same day so that we could write to the seller ourselves.

[Randall Alan]

There are some unanswered questions in your post.  Like, "How did you notify your realtor?"  If you emailed at 5pm, that's different than a phone call at 10am.  You also don't mention how much the escrow was.  Is it $5,000, or $1,000.  I would let your realtor know that you are really pissed that they didn't act on your behalf (if you spoke with them directly).  If it was an email situation - that sort of 50/50 in my book.  With something so deadline oriented, it should have been direct contact.  

If it was direct contact, I would definitely raise it with the realtor, and perhaps their broker.  Presuming you continue on with this realtor, I would suggest that they compensate you out of their commission on the property you eventually buy.  That's sort of a win-win - in that it's less "directly out of their pocket" than to ask that they front that cost.  I'm not a legal expert at all, but it seems like the realtor should be culpable if they actually received your communication on time.  Again - it makes a big difference in my book in how you contacted them on all these things.

Otherwise, a contract is a contract - and the seller has every right to keep the money if they did not receive a timely response that you were cancelling.

All the best!

Randy