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Old 01-25-2012, 12:20 PM
 
Location: Aurora, IL
2 posts, read 7,607 times
Reputation: 11

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I have a buyer that submitted an offer on a short sale back in November and deposited EM with the offer to the listing Broker. The sellers signed the offer but did not follow up with the listing agent or attorney on gathering any of the needed information for processing the short sale. Eventually the buyers tired of waiting and cancelled their offer within the frame work of the contract and requested EM be returned. However, the listing agent cannot locate the sellers, they do not respond to phone, email and regular mail. Sellers attorney will no longer represent them because of their refusal to communicate. How can we get the EM returned if sellers cannot be located to sign off?
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Old 01-25-2012, 12:24 PM
 
Location: Chicago
2,883 posts, read 3,842,668 times
Reputation: 2743
It was my understanding that the listing broker was supposed to deposit earnest money in an escrow account and that the sellers aren't supposed to get that money til closing. The buyer's attorney should get involved and if that is the case that the funds should be in an escrow account, I would think the listing brokerage would be liable.
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Old 01-25-2012, 01:15 PM
 
169 posts, read 459,947 times
Reputation: 67
I would think that would be in the contract as well? And ditto to the escrow account. Why would the sellers need to sign off if the buyers have the right to cancel their contract at this point? Think about that for a second. Couldn't people just refuse to sign b/c they don't want the deal to fall apart? Something doesn't add up here.
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Old 01-25-2012, 05:57 PM
 
Location: Barrington
41,852 posts, read 31,715,364 times
Reputation: 14076
It is customary for the earnest money deposit to be contingent upon the bank's approval in a short sale, because there is no contract unless the bank (s) agrees to it.

For whatever reason, it sounds like earnest monies were paid upfront and then the buyers withdrew their offer. Do I have this right?
.
How much $ are we talking about?
Who was the check payable to?
Who cashed the check?
Who has the funds?

Have you contacted the listing agent's broker?

Last edited by middle-aged mom; 01-25-2012 at 06:23 PM..
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Old 01-25-2012, 07:48 PM
 
Location: Aurora, IL
2 posts, read 7,607 times
Reputation: 11
The earnest money was given to the listing broker once the seller accepted the buyers offer. The listing broker deposited the money in accordance with re law. The problem is the sellers did not follow through with working with their lender and realtor to get the approval for the short sale so the buyer cancelled the contract and asked the listing broker to return EM. The listing broker needs the seller to sign off to the return. The seller is no longer returning calls or emails from the realtor. How can the buyer get their money returned if listing broker cannot get seller ok?
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Old 01-27-2012, 05:17 PM
 
Location: Batavia, IL
2 posts, read 6,373 times
Reputation: 10
I would think that the buyer's attorney could insist that the listing office return the earnest money since the contract and apparently their listing agreement is no longer in effect. If they have made attempts to contact the seller and they will not reply, I don't see how the listing office could justify continuing to hold EM on a cancelled contract.
Have they tried tracking the sellers through Spokeo or Facebook?
Please let us know how this turns out. Good Luck!
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Old 02-06-2012, 10:36 PM
 
936 posts, read 1,748,383 times
Reputation: 934
The listing agent needs the signatures of both parties in order to return the earnest money to the buyer, or else the listing agent could be in big trouble with the State.

The listing agent has the option of deposting the funds with the Clerk of the Circuit Court in order for them to work it out. However, that rarely happens because the listing agent initially incurs the expenses for that.

What typically happens is that the buyer's attorney files the appropriate documents with the Court and you'll get a court date. The seller isn't likely to appear in your situation based upon what you have said. The Court can then direct the listing agent to disburse those funds to you.

The bottom line is that the broker's licensing law prohibits him or her from just unilateraly cutting a check to you without the seller's permission. But I'd be all over that listing agent for signing a listing agreement with such a flaky seller and putting you in this position.

disclaimer-- this isn't legal advice- check with your attorney
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Old 02-06-2012, 11:54 PM
 
Location: Not where you ever lived
11,544 posts, read 25,075,396 times
Reputation: 6183
There is many a slip between the cup and the lip. Once a contract is signed and earnest money is gven the bank has to approve the sale. If it does not then it is the Bank's fiduciary responsibility to notify the realtor's who in turn notify their clients. Before it is approved there must be an appraisal by the bank and a termite inspection. Issues found in the house much be resolved before the sale will go forward. Once it approved the Lawyer must read the Deed an write and Opinion as to the saleabilty of the Property in question. If there is a problem with the Title it has to be cleared off before the bank can forward and the Property is Closed.

The Buyer should have been been on the realtor AND their bank. FHA and VA Loans noramally take 6-9 weeks or longer to close. It may be much longer in Chicago or for a Short Sale.

The buyer who lost Escrow money needs to take the realtor to Small Claims Court. No lawyer will touch it.

I bought and sold a lot of houses. I've never seen a state that allowed Realtors to give Earnest Money to the seller as it is usually held in Escrow and figured in the Dispersement at Closing.

But I did see a shyster try it and my friend eventually got her money back. He was in bed with a contractor who was passing off shoddy work as a finished repair when it clearly was not. He forgot about the twisted rafters and the house not squarely on the foundation among other little things. It was discovered im the independent home inspection the buyer paid for. The house had been in straight line winds that did a lot of damage.
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