Home Buying in 66226>Question Details

jules wilcox, Home Buyer in Overland Park, KS

Are there legal precedents in Kansas for disputed Earnest Money dispersal?

Asked by jules wilcox, Overland Park, KS Tue Mar 5, 2013

My loan was denied. My contract clearly states that it is contingent upon being granted a loan, and that the earnest money should be returned to the Buyer in the case of loan denial. The Seller is mad, and is maliciously refusing to sign the cancellation contract returning my earnest money. Interpleading and court costs will come out of MY earnest money. Can I recover costs from the Seller?

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3
Debbie Gillum’s answer
Hopfully the sellers agent will be able to convence the Sellers how important it is for them the release your EM, If the owner is unwilling to release the funds you will need to seek legal advise. There is always small claims court too.
0 votes Thank Flag Link Mon Mar 11, 2013
The seller usually cannot market the property for sale until you're released from your contract, that's pretty compelling. You're not gonna buy it, so if they really want to sell, they need to release and get it back on the market.

have your agent check to make sure it's not back on the market, might be time for your agent to get his/her broker involved.

Seller is just being a jerk IMO, you should contact an attorney and perhaps have a strongly worded letter sent to the seller.
0 votes Thank Flag Link Wed Jan 6, 2016
Jules,

Unfortunately, there are only three ways earnest money is released by contract. 1) At closing, 2) by mutual written consent of buyer and seller, or 3) by a court of competent jurisdiction. This is true even if you fulfilled the contract at every point.

What does this mean? If you used a third party escrow company, neither buyer nor seller will receive the earnest money until there is a mutual written agreement to release it.

Your first step, if you haven't done so already, is to get in touch with your agent/broker (and/or attorney) to discuss strategies for helping the seller understand that it is in their best interests to release the funds back to you. As long as your lender has produced proof in writing that they were unable to finance you, the seller should eventually come around and sign off on returning your funds.

If all else fails and you live in Johnson County, consider filing a claim yourself in small claims court (assuming your EMD was $4000 or less). For a small court fee, you can demonstrate to the judge that you performed on the contract and enjoy very strong odds of getting your money back.

Dwight Goodwin, REALTOR®
http://www.dwightgoodwin.com
0 votes Thank Flag Link Tue Mar 5, 2013
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