Another Earnest Money situation - Seller won't sign Release to end buyer

[Belinda Lopez]

I seem to be getting all the 'fun' ones lately!

I had a property under contract with $50 in earnest money to the seller. I found an end buyer and they put up $1k on the Assignment of Contract contract with the standard, only refundable if a clear Title cannot be produced. Now, I've been working with this seller over a year on this estate property and everything was great until two days before closing when an IRS lien was discovered against one of the heirs husbands. That stopped everything in its tracks and I started the process to get their earnest money returned to them.

We did a Termination of Contract from the Assignee to the seller and the Title company sent her (seller) a release of earnest money form. The seller refused to sign it b/c she says she had a contract with me, not the end buyer. Argh! She's very elderly and we've been using a family friend of hers to help on her side as she is out of town. I asked the Title company if I could just sign the release on the $1k since that earnest money was for the Assignment and not part of the original contract. They are reluctant to do so unless the Seller also signs the release.

Has anyone run into a similar situation? End buyer's agent is blowing up my phone and saying I just need to pay them the $1k asap. They had a real estate agent 'helping' them and she is a nut, threatening to send someone to stand on my doorstep and calling all day long. I'm ready to report her to TREC for harassment as we are doing everything we can to get the money released.