Home Buying in Buckeye>Question Details

joehawk9620, Home Buyer in Casa Grande, AZ

I have lost $1,500.00 in earnest money payments on real estate deals that did not work out. How can I get my money back?

Asked by joehawk9620, Casa Grande, AZ Thu Oct 4, 2012

I selected a lot for a house to be built on with Shea Homes development in Buckeye, AZ. I paid $500.00 in earnest money. I was eventually denied. I did not find this out right away. When I questioned Shea why I had not heard from them, I was referred to a finance company. I did not get my earnest $500.00 back from Shea. Now, with this finance company I selected another house already built and being sold by the owner. I paid $1,000.00 earnest money to the title company for this house. The finance company took so long in their process that the seller pulled out of the agreement and demanded my earnest money from the title company and the title company gave the seller my earnest money.

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Answers

9
Sonny Shrivastava’s answer
Don, if you refer to the AAR Arizona contract you will see that the escrow company has the authority to unilaterally decide, without approval of either party, the appropriate disposition of earnest money in the event of a dispute. Many escrow companies will not exercise this authority for liability reasons, but some will. If the buyer and seller signed an AAR contract and did not expressly waive that requirement, it is within the escrow company's authority to decide who gets the earnest money.
0 votes Thank Flag Link Sun Oct 28, 2012
Consult with a lawyer.

I'm sure you've gotten the message by now that you didn't have representation in either deal.

Even so, that part about the seller demanding your earnest money from the title company and the title company giving it away without your approval is odd. You certainly should investigate whether the title company was acting properly.

You might also contact the Arizona Attorney General's office.

Hope that helps.
1 vote Thank Flag Link Fri Oct 26, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Joe,
I am sorry to hear of your problems. I strongly recommend that buyers use a Buyer's agent, experienced in Builder transaction, when buying from a builder to avoid the problems you experienced. One really needs to read the builder contracts carefully and understand your risks . The Builder's Agent represents the Builder, not you. The standard AZ Realtor Purchase contract would have returned your earnest money under the Loan contingency provision. Builders use their own contract which does not protected you. Having said that, the Agent at the Builder may have actually been acting in a Dual Agency capacity and you might get the problem address by filing a complaint at the AZ Department of Real Estate. As mentioned, you might want to talk to a real estate attorney, to explore you options, but as pointed out, the cost may not be worth it.

Always get a loan pre-qualification from an experienced lender before you go shopping. If the Lender you talk to did not ask you for a copy of your tax returns and other proof of earnings, you can be sure the Pre-Qualification you got is not worth the paper it is printed on. Never give the Builder a deposit until you have your loan secured. Once you have a loan Pre-Qualification from a good lender, you can consider if the deal being offered by the Builder's lender is better or worse than your lender. You can even go back to your chosen lender and see if they can match the Builders lender incentives. These so called Builder incentives on loans are often paid by you over the life of the loan or through a higher purchase price. There is no free ride.

When buying from a private seller, do not give them any money until you have a real estate lawyer review the transaction contract, or use an experienced Realtor that knows how to protect you. Many Realtors are not experienced in how some of these deals should be structured, such as "Contract for Deed" or so called Lease Purchase Contracts to protect both buyer and seller. There are a bunch of scams out there to take your money. Get experienced representation.

If you want to discuss this further, give me a call.

Regards,

Loren Hoboy-Realtor
Your Local Expert
Central AZ Real Estate
LHoboy@centralAZhomes.com
623-688-0004
1 vote Thank Flag Link Fri Oct 26, 2012
Hi Joe,

Here Loren Hoboy's direct number is 623-297-3537.

Good luck & all the best,
Ros
Web Reference: http://www.ezAZloan.com
0 votes Thank Flag Link Fri Oct 26, 2012
Joe,

I am sorry to hear of your losses. Although I cannot help you how to get your money back (there may be a way to get your earnest money back, explained below), I can advise you to always, always, always use your own Real Estate Agent to represent your best interests. From your question, it sounds like you didn't have one in either case, otherwise, they would have been watching this for you. Using the builder's agent does not count - they represent the builder's interest.

If you are still looking to purchase a home, may I suggest you contact Loren Hoboy, a Realtor I've worked with for quite a while who knows the market and is very detail oriented. He may be able to help you get back your earnest money deposits to use on the home you finally do buy with his assistance.

Please feel free to contact me directly if you have any further questions, I'd be glad to help.

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct
http://www.ezAZloan.com

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline loans (NO minimum credit score, NO appraisal required) Go Green rehab loans, HomePath, Investor Friendly (10 financed properties), VA, USDA, Jumbo, Conventional, plus, we allow Escrow HoldBacks!
Web Reference: http://www.ezAZloan.com
0 votes Thank Flag Link Fri Oct 26, 2012
Joe,

It does not sound like you understood your contract, so either you weren't represented by an agent or you did not use one. In order to see any of your earnest money, you will need to contact an attorney. At this point in time, you have a legal issue of getting back earnest money that was retained by both sellers due to your breach of contract. You need an attorney to figure out how, per the terms of the contract, you can challenge the seller(s). DO NOT ACCEPT LEGAL ADVICE FROM A REAL ESTATE AGENT.
0 votes Thank Flag Link Fri Oct 5, 2012
Realtors are tasked with looking out for the interests of clients. I hope you decide to be represented by a professional Realtor and follow the advice provided.

Many of us spend years building knowledge and a team of individuals to support our efforts for clients.

Most of us represent you at no fee as we are paid by the sellers in a transaction.

Please reach out to a Realtor that you respect and work together to find you a great new home.
0 votes Thank Flag Link Thu Oct 4, 2012
Hello Joe ,

It's impossible to answer your question without seeng your contract and having more information about what happened in both situations. It's sounds like you weren't represented by a Real Estate Agent or Broker. A Realtor would have represented your interests, If your loan was denied, you should have been entitled to a refund of your earnest money.

You can certainly ask for a written explanation and/or you can also pursue legal action however, but often the legal costs and fees will likely far exceed the amount you lost.

I work in the Buckeye area. If you have any questions, feel free to give me a call.

Edie Wood REALTOR
602-315-4329 (cell - Verizon)
Arizona Team Realty
edie.atr@usinternet.com (email direct)
http://www.ArizonaTeamRealty.com (website)
0 votes Thank Flag Link Thu Oct 4, 2012
Joe,

It sounds like both time you were not represented by a real estate broker. I'm not sure exactly what went on without seeing your actual contract, but if you had an agent, then you probably wouldn't be unprotected like this.

As for what you can do, it all depends on the contract. Basically, you can only ask for the money back, nicely. If they don't return your money, then there's not much you can do. If you pursue the legal route, you'll likely spend 10x more on legal fees than your deposits.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Thu Oct 4, 2012
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