Can a realtor keep your earnest money if both parties have signed a release?

Asked by Laginahp78, 60438 Sat Nov 3, 2012

Hi we entered into a realestate contract in Illinois for a home purchase in the end we were denied financing both parties signed a release, but the realtor still has not sent our money back. It as been over two weeks how long do they have to return our money we can't get an answer our realtor has soured and given up cause she's no longer in it for a return but is this illeigal to kep our money if seller and buyer both signed a release?

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Alan May, Agent, Evanston, IL
Sat Nov 3, 2012
BEST ANSWER
In Illinois, the earnest money is typically held by one of the two real estate agencies in the transaction. They cannot release any money at all, until they've received written "direction" from both sides of the deal (ie: the buyer AND the seller, must agree).

Once that agreement has been sent in writing by both parties (which appears to have been done in your case)... the agency holding the money should send you the money in a "reasonable period of time". Unfortunately, there is no specific time-frame required.

I would place a call in to your agent, and ask them to follow the money, and let you know when you should expect it. Two weeks is plenty of time for them to have released your money... but it's also within that vague "reasonable period"... (unless, of course you're the one waiting on the money).

Good luck.
0 votes
You're welcome. I hope you receive your earnest back shortly.
Flag Sun Nov 4, 2012
Thanks great answer!
Flag Sat Nov 3, 2012
Bernardo kin…, Home Buyer, Saint Ansgar, IA
Tue Nov 5, 2013
Do the real estate regulations apply to all 50 states equally? May i ask how one proceeds when Broker shows you a house and reads over the phone a list of cosmetic improvements provided to him by the seller. Buyer went ahead with the survey any way and the results(and supporting photos...12 approx. single spaced pages) showed hazardous and/ or extremely pricystructural,electric,plumbing,roofing problems as well as completely ridiculous issues like a hot tub powered with a 2 pin non grounded extension cord and a t.v. cable running from this house to the next one along the road. We have a 800+ credit rating ,have been pre approved and were completely dependent on a good realtor. What went wrong and how to fix it. The house was NOT placed under contract '' as is"
0 votes
Alberto Pach…, , Granada Hills, CA
Tue Nov 6, 2012
NO It can not since Escrow hold and disburse the money to the appropiate partiy either buyer or seller.

Alberto Pacheco
Realtor
0 votes
Kawain Payne, Agent, Seal Beach, CA
Mon Nov 5, 2012
To my understanding In Illinois you use an attorney to complete the real estate transaction they function the way escrow companies function in California.

You should contact your real estate attorney, there is no reason for an agent to keep the deposit.

Best ofluck to you,

Kawain Payne, Realtor
0 votes
carlos parra…, Other Pro, Monrovia, CA
Mon Nov 5, 2012
I am not sure why you asked this question in California, but here Agent must deposit into Escrow account and Agent does not have access.
0 votes
Alexander El…, Agent, Hollywood, CA
Sat Nov 3, 2012
Real Estate transactions regulated by the State. I'm not sure the Illinois procedure, but in California its has to be written request from the other party in the transaction allowed to release the funds to you.
0 votes
Jane Peters, Agent, Los Angeles, CA
Sat Nov 3, 2012
Wherever that money is, and in California, as everyone mentions, it is held by a neutral third part, it should not be accessible by your Realtor® or their brokerage. But again, this is a question to be posted in Illinois. I am sure you will get the money, but it is annoying that you have not yet received it.
Web Reference:  http://www.homejane.com
0 votes
Dorene Slavi…, Agent, Torrance, CA
Sat Nov 3, 2012
Dear Laginahp,

The Realtor does not hold any trust funds but they are held by an Escrow company who is a neutral third party . If you have not gotten your money refunded, this is the place to look. Make sure the escrow company has all the signed documents. The Escrow company also has their own documents that must be signed by all parties before the funds can be released. IF you need help, contact your "Buyer Agent" to assist you.
0 votes
Marty Walker, Agent, Los Angeles, CA
Sat Nov 3, 2012
In California, the earnest money would be held by the escrow company for the transaction (neutral third party), and if both buyer and seller have agreed in writing to the cancellation, escrow would be required to release the money. As an agent who works in CA, I can't fathom a real estate agent (1) being in possession of the earnest money, and (2) feeling inclined not to release it.
0 votes
Janey Bishop, Agent, Calabasas, CA
Sat Nov 3, 2012
You should probably post this in Illinois to get the most appropriate response. Usually the delay is they want paperwork in triplicate. Contact whoever is holding the funds and ask if any paperwork is outstanding and when they intent to release the funds. Follow up in writing. In CA we use small claims court and are entitled to all collection fees. I suspect your rules are similar. But document your conversations.
0 votes
Ron Thomas, Agent, Fresno, CA
Sat Nov 3, 2012
That DEPOSIT money is a very serious responsibility:
You might compain to the BROKER, and you might file a complaint with the local MLS. In the extreme; you could compain to the State Real Estate department.
0 votes
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