What happens if a buyers agent fails to collect earnest money from their client?

Asked by Kaye, 44133 Thu Feb 25, 2010

A contract was signed and a close date set, but the deal fell through because the agents buyer did not have the funds to buy the house. Is it a violation on the agents part that he failed to collect the earnest money?

Help the community by answering this question:

+ web reference
Web reference:

Answers

7
Mary Starkey, , Dayton, OH
Thu Feb 25, 2010
Kaye, even if earnest money was supposed to be collected ( it is not mandatory unless mentioned in the contract), the buyers would have been able to have it returned to them since they did not have the funds to close. Most contracts are written so that the sale is contingent on the buyer being able to obtain a mortgage.
0 votes
Janet Unkefer, , Minerva, OH
Thu Feb 25, 2010
Hi Kaye,

Did your contract specify that there was an amount for earnest money? Some purchase agreements do not require earnest money. It all depends on how your contract was written. If it was written on the contract then when the offer was fully accepted by all parties the agent should have collected the money that was specified and deposited it with the agency to be held in their special escrow account..

Good Luck, I hope it all works out for you.

Janet Unkefer, Agent
Cutler Real Estate
330-868-6219
junkefer.cutlerhomes.com
0 votes
Keith Sorem, Agent, Glendale, CA
Thu Feb 25, 2010
Did YOUR Realtor ask for proof of funds to close when the offer was submitted?
This is a basic step....Sorry to hear about your problem.

The listing agent's job is to anticipate problems, particularly with buyers and their financing.
0 votes
James Deskins, Agent, Worthington, OH
Thu Feb 25, 2010
Kaye, whether there is a violation all depends on how the terms of the contract are written and and the laws of the State of Ohio. Most contracts state that the agent must collect earnest money at some point and must deposit it as the contract stipulates. The contract will also stipulate how a seller may, or may not, get the earnest money. I don't know how your contract was written but in Columbus if the buyer can't get financing they will normally get their earnest money back so it might be a moot point as far as you getting anything. However, the agent may still be in violation of the terms of the contract. Go back and read the earnest money clause in the contract.

Disclaimer: I'm not an attorney and this is not legal advice.

Hey, Alma, there is no Hillsborough county in Ohio..... she's in Cuyahoga County, Ohio.
0 votes
Colin Campbe…, , Carneys Point Township, NJ
Thu Feb 25, 2010
Sounds like a house of cards - buyers agent is obligated HOWEVER sellers agent should have checked and followed up.....drop this agent now, and find a professional!
0 votes
David Sharkey, Agent, Cleveland, OH
Thu Feb 25, 2010
If the earnest money is not collected per the terms of the contract it is the duty of the buyer's agent to inform the seller's agent, ASAP, that the money has not been collected.
0 votes
Actually that would depend on what state you are in. There is no affirmative duty for the Buyer's agent to tell the Seller's agent they are unable to collect the earnest money.. IN Utah.
Flag Tue Mar 11, 2014
Alma Kee, Agent, Tampa, FL
Thu Feb 25, 2010
Yes, and it's also not good follow up by the Seller's Realtor to get proof that the escrow deposit was made.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more