Broker/seller refused to give earnest money back (real estate, insurance)

[gallery2000]

I saw a property of $189,000 on the internet in Florida. I called the broker and he sent me the contract.

In my contract, the broker request the buyer to pay 4% commission, title insurance, and closing cost. He also requested $10,000 earnest money for this $189,000 property. I sent in the $10,000.

My loan did not go through and I don't like the terms in the contract so I would like my earnest money back. He refused to give back my earnest money because he is also the owner of that property.

Can he do that? Can the broker not disclose that he is the owner of the building at the time of the contract and since he is the owner he has the right not to give back my money?

Please help

[zphtar]

You might want to try reading this. The information as to if you can get your money back or not applies no matter which state you live in.

Earnest Money (http://www.cabr.org/earnest.htm - broken link)

[MiamiRob]

gallery2000 I am a realtor but you did not mention if he was a mortgage broker or a real estate broker. If he is a real estate broker he must disclose that he is the owner of the property. Also if you fail to qualify for a mortgage your escrow deposit should be returned. I don't know what type of contract you signed either. We use a standard contract that spells out all the terms that protects both the buyer & seller of a property. Escrow disputes must be reported to FREC (Florida Real Estate Commision) but again this depends if the broker is a Realtor. Hope that helps.

[Prichard]

Like the other poster mentioned, whether you are entitled to your money back or not will depend on the type of contract you signed, any changes you made to the contract, and your circumstances. There are about 4 standard types of contracts used for residential purchases in Florida.

But, you mentioned two somewhat conflicting things: 1) Your loan did not go through; 2) You didn't like the terms of the contract. Depending on your contract, there may be a provision to let you out if you could not get the loan that is referenced under the financing contingency. However, just because you didn't get the loan you wanted doesn't mean you couldn't get one that complied with what your contract states, so be careful with the way you read this.

Nothing will let you out of the contract simply because you don't like it's terms. I hate to say this, but after you sign the contract, whether you like its terms or not is too late. You better go take it to a lawyer before certain time deadlines might run. I wouldn't mess around with it yourself.

[lalavan]

Everyone should know about this great site for looking up lawyers or getting answers from lawyers for free (since not paid the lawyer will have disclaimers that they do not rep you) - used it to check on why lawyer for freind did not give her a receipt - i received multiple answers from concerned lawyers who stated clearly what to do and also to notify to get it looked into to see if needs suspensions etc

AVVO.com

[AONE]

Escrow might not be returned if you exceeded the timelines spelled out in the contract. ex - in the standard RE contract you have 30 days to provide loan commitment failing to do so forfeits the escrow. It is required to disclose as a Realtor you own a property. that would be something you can file a complaint on. If the agent was holding the escrow in his escrow account you can also put it in dispute so he has 15 days to declare there is a dispute.

For my clients I have them deposit with the title company it keeps it with an unbiased (hopefully) source.

[GregTraub]

If the owner is a licensed agent and didn't disclose this to you before the time of contract (should have in the advertising). Then I would first report him to the Department of business and professional regulation (DBPR: Home Page), then get yourself an attorney and get their legal opinion. What your rights are to the deposit are going to greatly depend what you had in that contract you signed (the fact you didn't like the terms of the contract should have been dealt with up front, once you signed it, you agreed to the terms and cancel because of that now!)

If your escrow is in fact being held by a licensed real estate brokerage (not by the seller himself) then the dispute must be reported to the FREC by the broker, and the FREC can either issue a ruling as to who gets the deposit...or can kick it back and say you have to litigate. A broker isn't wise to give the funds to a seller or a buyer unless both come to an agreement or they've been issued a disbursement order from the FREC or a court.

Unfortunately, without more details, it looks like you are in for quite a bit of hassle whether you get the $ back or not. Using a good buyers agent would have saved you a whole lot of aggravation as a lot of these issues are things a buyer agent learns to look for on day 1.....and a buyers agent works with no charge to you!!!!

[VTGal]

Originally Posted by gallery2000

I saw a property of $189,000 on the internet in Florida. I called the broker and he sent me the contract.

Your first statement is concerning or maybe I'm reading into it too much.
Did you actually see this property in person?

[bmw335xi]

Originally Posted by VTGal

Your first statement is concerning or maybe I'm reading into it too much.
Did you actually see this property in person?

This is actually quite normal these days. You find a property online, make an offer contingent upon inspection, if accepted you fly down to inspect the property. That's how I bought my current place.

[Chengdu Nanhai]

Originally Posted by bmw335xi

This is actually quite normal these days. You find a property online, make an offer contingent upon inspection, if accepted you fly down to inspect the property. That's how I bought my current place.

As a former realtor, I highly advise against that... I would never have my clients make an offer on a house sight unseen...