Seller won’t release earnest money back

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Seller won’t release earnest money back

Tralecia K Young
Member since 2020 · 41 posts · 8 votes

Sellers won’t release earnest money deposit back after denial of mortgage from the lender. What are my options to get their earnest money deposit back?

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
5y
Originally posted by @Tralecia K Young:

@Nicholas Weckstein

The date of the letter was on the ninth but I sent a cancellation like on the seventh stating that I wasn’t going to get mortgage contingency. I believe my attorney sent it over on the 10th but it was dated for the ninth. apparently my attorney was super busy that he wasn’t able to respond quick enough to send it the same day. I believe he spoke with the attorney and he’s just waiting back to hear what the seller wants to do.

Sounds like you missed your contingency date if it was the contingency ended the 9th and you sent the financing denial letter on the 10th. Seems pretty clear to me if the facts as stated are true, seller gets the EMD. Your lawyer being too busy to adhere to the deadline doesnt change the fact of when the deadline was.

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  • Tralecia K Young
    OP
    Member since 2020 · 41 posts · 8 votes
    5y

    @Russell Brazil

    Yes I sent a copy of a contractor estimate totaling water damage worth $20,000.00 way before the deadline. I also sent a cancellation on the 7th. Everything you stated in your response I have done that’s what I’m confused about.

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    • Joe SplitrockPro Member
      Moderator
      Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
      5y
      Originally posted by @Tralecia K Young:

      @Russell Brazil

      Yes I sent a copy of a contractor estimate totaling water damage worth $20,000.00 way before the deadline. I also sent a cancellation on the 7th. Everything you stated in your response I have done that’s what I’m confused about.

      Even if you sent things ahead of time and they were aware of the cancellation, they could try go hold money on the technicality of the signed release not being received by the 9th. It sounds like the seller has a bad property they want to unload, so they may look for any way possible to keep your money. Based on what you said, your attorney dropped the ball and they need to work this out

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  • Tralecia K Young
    OP
    Member since 2020 · 41 posts · 8 votes
    5y

    @Deanna Opgenort

    Thank you so much!

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Brandon Sturgill:

    @Tralecia K Young this is in Ohio?...EMD is largely pointless here....what happens is the money gets tied in escrow until there is consensus to release the funds...no consensus, no release....the money sits in limbo for 2-years and then goes back to you, its a lose/lose situation....or you get a court opinion...so, pay $6,000 in legal fees for $5,000...not a great idea...

    In the last 20 requests for EMD we have submitted for listing clients where a buyer was unable to perform on a deal, the broker on the other side of the table acknowledges the initial request and then ignores every piece of documentation and future request...there is no repercussion...a lawyer might be able to help with motivation here.

    This is usually a "pissing match" fueled by misunderstanding of how EMD works...

    Your agent/broker should be advising you on this stuff...

    Read this: https://codes.ohio.gov/ohio-re...

    Yeah in my experience a letter from an attorney has been enough to knock EMD loose here in Columbus, Ohio

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  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    Hi Tralecia, in Ohio, if you fall out due to one of your contingencies you are supposed to get your earnest money back (unless otherwise specified e.g non-refundable EMD). The earnest money will just sit with the title company until a decision is made. If it's a sizeable deposit, I would get a lawyer involved.

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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    5y

    We’ve all heard enough about Ohio law... apparently the property is in New York.

    How does someone successfully cancel a contract on the 7th by invoking a financing contingency when the lender denial comes on the 9th? That’s a question for a NY attorney. And preferably not the same one who missed the deadline of the 9th to invoke it.

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