Home Buying in 15003>Question Details

Christine, Home Buyer in Zelienople, PA

Seller cashed earnest money check BEFORE inspection was complete or appraisal done, Is this legal?

Asked by Christine, Zelienople, PA Fri Mar 2, 2012

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If you went thru a Real Estate agent the agent would hold the money in escrow until closing. At closing money would be applied to sale at closing. If the deal would fall thru then agent would return money as outlined in sales agreement. Not an attorney but I see no legal reason why seller could not cash check but seller may be required to return money to buyer based on the terms of the agreement if deal falls thru. I f the agreement says the house must pass inspection or the sale can be cancelled then seller would need to return the money. Consult an attorney for additional iinfo.
0 votes Thank Flag Link Sat Mar 3, 2012
Are you working with a Realtor? If that's the case, the office would have cashed your escrow check since they only have 48 hours to deposit it. It will be applied against your closing costs. If the deal falls through, both you and the seller will sign a termination form and indicate who is to get the escrow check. If you are dealing with a For Sale by Owner, talk to the seller and make sure it will still be applied against your closing costs. Also ask the seller what happens if you can't come to some agreement on the repairs - who will get the check back.
1 vote Thank Flag Link Fri Mar 2, 2012
Hi Christine, you need to look through your contract for the appropriate provisions, consult your Realtor and possibly an attorney!

Unfortunately, I cannot advise you how the earnest money is handled in PA. In Maryland, the earnest money deposit is typically held in escrow by the selling agent's broker unless otherwise requested and negotiated. It is then credited back to the buyer at closing. The seller only receives a copy of the check!

Again, I don't know how the earnest money is handled in PA but since you sound very concerned, I suggest you consult with your Realtor and an attorney. As a general rule, all legal questions should be handled by an attorney.

Good luck & best wishes!
0 votes Thank Flag Link Fri Mar 2, 2012
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