Home Buying in Maryland>Question Details

Michelle, Home Buyer in Virginia

Help, how do I get my deposit back?

Asked by Michelle, Virginia Tue Oct 16, 2007

I legitimately backed out of a contract in August. The recission letter was dated August 22 or 23rd and I am still waiting to get my money back. I am getting the run around from the realtor's office. I need to know what my recourse is at this point

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15
Did you sign a release and do you have a copy of it? Were you represented by a buyers agent? If so, have you spoken to your agents manager?
1 vote Thank Flag Link Tue Oct 16, 2007
I found a rental that I wanted to rent with the help of a realtor in San Antonio, TX. I made out contract and gave the application fee and a deposit of $900 that would be applied to rent. The application was denied and I was not able to get the rental. Prudential required a money order for the $900 and I gave them that. When the application fell through, I asked for my money order back. When I took the money order to bank to deposit I was told by the bank that because Prudential had stamped on the money order "for deposit only to Prudential" I could not deposit. I took back to Prudential explaining the problem and they said all they could do was to deposit the money order and I would have to wait 10 business days to get a refund. Now I am getting the run around by Prudential that they will get to it when they have proof from the bank that the money was deposited and no problem with money order! Please can someone help me with this issue and how to get my money back? I do not understand how it is legal for Prudential to stamp for deposit only when the application process was not even complete and the application accepted!
0 votes Thank Flag Link Thu Oct 11, 2012
If you defaulted on the contract, the seller must agree in writing to release the earnest money. One of the questions is, who is holding the deposit money? Read the "default" clause in your contract. The refund of earnest money terms and conditions are spelled out in detail in the contract of sale. Often a letter from an attorney will expedite the refund. However, what may seem "legitimately" backed out to you, may not be so in the eyes of the seller.
Web Reference: http://www.homefinders.com
0 votes Thank Flag Link Sat Feb 2, 2008
You will get your money back for certain, if you were dealing with licensed broker in MD. You can also contact MD real estate commision and you will see how fast that check arrives.
0 votes Thank Flag Link Sat Dec 15, 2007
Hi everyone - Thank you so much for all of the wonderful responses. Posting my problem prompted the question, do you have the release! I had every other piece of paper, but it never dawned on me that I did not have a copy of the release. I asked for one and when I received it...I realized what the problem was. My home address had been written improperly on the release. Hence, the check was mailed to an address that doesn't exist.

I do not understand why it took corporate three weeks to get back to my realtor as to when they mailed the check to me...this information final came to me the day after I posted to you all...and the same date that I found out my address was incorrectly noted.

Regardless, all of your wonderful advice put me on the right track and I wish I had posted earlier. I am happy to report that I received my escrow money a few weeks after I posted!

Thanks! Michelle
0 votes Thank Flag Link Fri Dec 14, 2007
Just to clarify- your profile says buyer in Virginia, but you are posted in Maryland. If you still don't have your money:

Call the manager of the office. By Maryland law, any advertising, voice mail etc. that an agent uses must have a way to contact the manager or Broker.

If that doesn't work, visit the department of labor, licensing and regulation's website, and see who the broker of record is for the company. Call them- things should speed up then.

Maryland has strict laws about escrow money, and I don't think they can hold yours for that long. In brief, the rule is:

Both parties sign the release, and money is returned.
If one or both of the parties won't sign, the Broker gives the money to the court.

The process is spelled out in the contract. Good luck!
0 votes Thank Flag Link Sat Dec 1, 2007
Hi Michelle, I'm assuming your deposit is with an escrow company. If both parites cannot agree, then the escrow company will escalate the matter to arbitration. You might want to contact a local real estate attorney for advice and the local Realtor Association. Good luck.
0 votes Thank Flag Link Tue Oct 16, 2007
Michelle:
Your original contract spells out how the escrow funds are to be distributed in the event of a closing, a cancellation or whatever - Brokers have to walk a very fine line in the refund of earnest monies, and I believe they have three options, 1-Disburse as to written agreement of all parties (this includes the Real Estate Companies involved), 2-Put the funds into a court for a judge to make the final decision or 3 - send certified letters to all parties on how the funds will be disbursed and give notice that it will be done in so many days, unless a letter from one of the involvees says they disagree.
I would send certified letters, return receipt requested, to all parties, particularily the company holding the funds - and Good Luck!

Bill
Web Reference: http://www.billwootan.com
0 votes Thank Flag Link Tue Oct 16, 2007
Hi Michelle,

It sounds to me like the escrow/trust account is managed by corporate at another location. Before absorbing legal fees, I would suggest you make an effort to directly contact the source that is holding your funds. To me, it sounds like there is not a disupute about it's release, only a slow processing time.

If you find out there is some reason to withhold the release, please come back and repost the details. Based upon my assumption from the limited detail, I think it's a slow reacting corporate office.

I suggest that you put a firm request in writing, direct it to the corporate office (call and find out who manages the trust account) and cc the local manager and agent.

Do come back and let us know what happens.

Regards
Deborah
0 votes Thank Flag Link Tue Oct 16, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
To an extent I agree with Dave and Lisa, below, however there are times when a broker cannot return the deposit/earnest money. If the release has not in fact, beeen signed by all parties, then he would be foolish to just give the money back. He would be better off turning the issue over to the courts if the parties cannot come to an agreement. Of course, in most cases the court costs will use most, if not all of the deposit/earnest money, if he does so, and both parties lose.

It is always better to solve the dispute outside of court. However in your case you should demand a copy of the signed release, if indeed one exists, and if not then should should confront the broker holding the earnest money for an explanation.
Web Reference: http://www.thenelmsteam.com
0 votes Thank Flag Link Tue Oct 16, 2007
I would suggest contacting your agent and asking for a copy of the signed release. I would then call the agents manager and follow-up the conversation with a letter. If you still have not received the deposit after that, I would suggest your only recourse is to obtain legal advice.
0 votes Thank Flag Link Tue Oct 16, 2007
Your broker has to give you your deposit back if you had a legal reason to not go forth with the contract. For example if you cannot get financing, or if you had a home sale contingency and you were not able to sell your home in time. Have you spoken with the broker for the office? You need to write a letter to the broker, which I would hand-deliver if I were you. Make sure that the broker is aware of what is going on and that the agent has told the broker of the situation. It is the broker's responsibility to release your deposit after you sign the release addendum. I hope this helps - let me know if you have already spoken to the broker.
Web Reference: http://www.webberteam.com
0 votes Thank Flag Link Tue Oct 16, 2007
Hi Michelle. I just saw you post with additional info after I had already submitted my answer. At this point, I would contact the Maryland department of real estate and find out whether such a long delay is acceptable under Maryland laws. The corporate policy does not overwrite Maryland law and I have never heard of such a long period for receiving a refund check when the return of the money is not disputed. I don't mean to put fuel in the fire, but it annoys me when consumers report these kinds of experiences.
Here in CA, where deposits are handled by escrow companies, the checks are written as soon as the release is signed by everybody. Best of luck.
Web Reference: http://www.theMLShub.com
0 votes Thank Flag Link Tue Oct 16, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Hi Michelle. Where is the money right now? You say the Realtor's office is giving the run around. Is it your real estate office or the seller's office. When you say "the run around" what exactly does that mean. There are only so many options. Since it sounds like you cancelled the contract, the only question is whether you should get your deposit back or not and the answer to that depends on the terms of the contract. Is the real estate agent saying you are not entitled to the money or what reasons are you given why a check cannot be cut. Did the seller not sign the release? That's really the first thing we need to know. If it's a matter of the release not having been signed by the seller, then your recourse is with the seller because the real estate brokerage cannot release the disputed funds. It it's just a matter of cutting a check, then the delay seems to be inexusable. The money most likely sits in a trust account and there are certain rules that apply to handling trust funds. I would recommend that you schedule an appointment with the broker of the office that gives you the run around. It may be a matter of talking to the right person in the office and I'd take it to the top. If you can't get this resolved, I'd see an attorney to review the situation. It's unfortunate you have to deal with this as the money is not available for you to use for a deposit on another house. I would also recommend that you keep good records of when you did what. Good luck. It will help you present your case to the attorney if that should become necessary. Good luck.
Web Reference: http://www.theMLShub.com
0 votes Thank Flag Link Tue Oct 16, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Yes I signed a release, though I realize I do not have a copy of it, though I have the entire e-mail chain of the last two months that tells me when the the other sellers signed the release. I was told it is "policy" that corporate does not return checks for 30-45 days. I was then told last week that my money would be arriving any day. My real estate agent is new and spoke to her manager last week about this...which brough about the "you will receive your money any day" response. I'm totally frustrated and not sure what to do.
0 votes Thank Flag Link Tue Oct 16, 2007
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