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Rainer
19,780
Linda Mindock
Dream Town Realty - Chicago, IL
Representing buyers and sellers in Chicago

In Chicago, the earnest money is depositied with the seller's brokerage so the seller has to sign off to give the brokerage firm permission to release the funds.  

May 08, 2017 09:58 AM
Rainmaker
1,712,676
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

One of the best reasons is so you don't get sued for unauthorized action.

May 08, 2017 02:57 PM
Rainmaker
5,583,278
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

because the money is not the escrow agent's money to disperse until there is a release allowing them to do so...and instruction as to whom the deposit is to be paid.....

the seller could decide to make the buyer fight for the money!! doesn't mean the seller wins...it means the seller is pissed.... and making the buyer suffer by suing the escow agent for the funds.... 

it happens!!

May 08, 2017 10:57 AM
Rainmaker
613,494
Eve Alexander
Buyers Broker of Florida - Tampa, FL
Exclusively Representing ONLY Tampa Home Buyers

In the old days, buyers that worked with buyer agents, never got their escrow released, so this an attorney suggested and it worked perfectly.

This was the clause:

This contract conditioned on the buyers espress approval of inspections to be completed within 10 days of a mutually accepted contract.  Should inspections not be satisfactory to buyer, the buyer will notify the seller within 2 days of the inspection period.

This contract will then become null and void and all deposited monies will be refunded to buyer that same day....and it was...without signatures.

The other thing that we did was send the listing office a notice that the escrow funds would be released on Date and Time unless we heard from them otherwise. Then it was up to them to make a demand on the money.

Eve

May 08, 2017 10:54 AM
Ambassador
5,048,708
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I think it provides a wrtten direction/authorization to escrow to release the funds. They can't do anything without both parties' agreement in writing

May 08, 2017 10:49 AM
Rainmaker
809,258
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Because brokers or whoever holds the funds have to do what they are instructed by all parties.  The broker needs a paper trail of their instruction.  If the funds are released and then there is an earnest money dispute the responsible broker is still responsible for the funds whether they have released already or not so most require the signature from both parties to release to avoid any potential issues or disputes.  Here in Idaho Title Companies or the Buyer's brokerage hold the funds. -Kasey

May 08, 2017 01:04 PM
Rainmaker
7,834,939
Roy Kelley
Retired - Gaithersburg, MD

You need to follow and document the terms of the agreement.

May 08, 2017 12:25 PM
Rainmaker
1,466,207
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Karen Jones Lewis, MBA, Realtor One to complete a paper trail and two, a signed Release officially returns the EMD with everyone's approval.

May 08, 2017 11:46 AM
Rainer
3,461
Tanya Patterson
Patterson Investments - San Jose, CA
Because my number one priority is you!

The escrow company is not a party to the transaction so they can only release the deposit upon mutual instructions from the buyer and seller.

 

May 08, 2017 10:49 AM
Rainmaker
2,781,013
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This has always been a sticky wicket. Upfront language releasing is wise

May 08, 2017 09:48 AM
Ambassador
2,684,009
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     If they don't sign, Buyer will have to sue in Court. 

      If I was the Buyer, I would also sue the Seller for legal costs, and I would sue the Listing Broker.

May 08, 2017 06:30 PM
Rainmaker
989,552
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

If it isn't in writing it didn't happen - simple answer ;)

May 08, 2017 01:47 PM
Rainmaker
5,104,806
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Because it's the law that both parties need to sign off.

May 08, 2017 12:27 PM
Rainmaker
508,218
Joseph Domino 480-390-6011
HomeSmart - Scottsdale, AZ
Real Estate Made Easy

I always find the contract(s) used in different states to be something of a learning experience.  They can be very different.  Here in AZ our contract is very robust (10 pages) and covers almost any eventuality.  Our contract is very Buyer friendly.  Since we do not use attorneys in most transactions we rely on the escrow company to use the contract as instructions.  In the case stated above our contract would allow the escrow agent to make the decision based on the terms of the contract. As follows:

Release of Earnest Money: In the event of a dispute between Buyer and Seller regarding any Earnest Money deposited with Escrow Company, Buyer and Seller authorize Escrow Company to release the Earnest Money pursuant to the terms and conditions of this Contract in its sole and absolute discretion.

May 08, 2017 11:20 AM
Rainmaker
1,844,171
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

Just so that everyone is clear that the contract is void. Everything has to be reduced to writing remember.

May 08, 2017 10:11 AM
Rainmaker
4,434,127
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
Legal question
May 08, 2017 10:02 AM
Rainmaker
1,502,848
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Procedure and it makes it nice and obvious that the seller returns the money.  Some sellers can get angry and hold the money.  Happened to one of my buyers, the seller released all the funds except for an amount covering a city inspection that she had to pay for (some people don't listen to reason and only want things done their way).  Small amount and the agent paid the buyer back when it closed escrow with the new buyers.

 

Out in California, the parties can hold monies to cover inspections/expenses incurred.  For example a termite company is paid for their report when escrow closes sometimes (often).  If the buyer backs out, that company still needs to be paid so the buyer doesn't get all their deposit back then.

May 08, 2017 09:57 AM
Rainmaker
4,935,551
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Papaer trail.

 

May 11, 2017 07:33 AM
Rainmaker
864,658
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

For the funds to be released, there needs to have a mutual written consent from both parties. The seller is just going to squeeze every second before he or she returns the EMD.

May 10, 2017 01:50 PM
Rainmaker
5,868,372
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

In CO the title company will not release EM until all parties have signed.

May 10, 2017 07:49 AM
Rainmaker
1,725,896
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Becasue the escrow is a major element in a bilateral contract, hence any change must be agreed to by the parties to the contraact

May 09, 2017 07:30 AM
Rainmaker
4,800,082
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

To have a record that all parties understand and are aware of the cancellation.

May 09, 2017 06:03 AM
Rainmaker
599,274
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

Mutual acceptance is the law. I think it's ridiculous when the terms were already agreed to, but that's what the law requires.

May 09, 2017 05:48 AM
Rainmaker
3,071,489
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Joseph Domino nailed this one!

May 09, 2017 05:17 AM
Rainmaker
1,622,432
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

 I just had a seller who had to accept another offer and open another escrow ''subject to a cancellation'' without a buyer#1 signature, since B#1 and his agent just do not answer or show any signs of existence. 

May 09, 2017 01:09 AM
Rainmaker
4,319,419
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Karen Jones Lewis, MBA, Realtor - I never understood this!

And I have come across some sellers who are holding the deposit!

May 08, 2017 09:59 PM
Rainmaker
3,988,007
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

It is a CYA for the brokers, agents and esctow agents.

May 08, 2017 08:15 PM
Rainer
259,005
Mick Michaud
Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107 - Granbury, TX
Your Texas Lifestyle is Here!

I've run into this and it's generally a title company policy, not law. But each state is different.  Check with your local board.  or state RE department.

May 08, 2017 08:14 PM
Rainmaker
3,986,258
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

In Minnesota we have the cancellation  also.  Part of it is legal release of E-Money

May 08, 2017 08:09 PM
Rainmaker
1,157,785
FN LN
Toronto, ON

Laws and regulations vary from jurisdiction to jurisdiction.  Legal counsel for the relevant jurisdiction should be able to advise on this matter.

May 08, 2017 06:16 PM
Ambassador
3,344,906
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Because the seller is a party to the transaction and all parties must agree and consent. 

May 08, 2017 05:58 PM
Rainmaker
5,772,575
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Karen Jones Lewis, MBA, Realtor Ken Jones gave you a great answer.  A

May 08, 2017 05:36 PM
Rainmaker
3,416,038
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

It takes 2 signatures to enter into a contract and 2 signatures to get out of said contract

May 08, 2017 05:25 PM
Rainmaker
4,160,025
John Pusa
Glendale, CA

Karen Jones Lewis, MBA, Realtor It is according to the term of the agreement.

May 08, 2017 04:51 PM
Ambassador
3,587,835
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Because it's contract law. It's a  simple requirement that must be given to title company to release earnest deposit and close out the file. Plus I imaine a broker would require it for their files. I do.

May 08, 2017 04:33 PM
Rainmaker
5,215,388
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Earnest money is held for the benefit of the parties, so each needs to approve distribution!

May 08, 2017 02:13 PM
Rainmaker
900,008
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

You should ask your attorney regarding your local laws, or maybe that's what's in the contract?

May 08, 2017 01:58 PM
Ambassador
5,228,997
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

Oh, I have that VERY same annoyance, Karen!  I can understand having or needing to sign a termination agreement but, not release of monies when it clearly states in the Contract that they are to be released.  It only causes problems with difficult clients who refuse to sign the releases.

May 08, 2017 01:07 PM
Rainmaker
1,239,801
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

I have one that I managed to get back two months after cancellation. The seller wanted to drag the buyer into a deal that she did not want to have.

It took through an arbitration initiated by a Standford law school faculty and filing complaints to BRE and RE Board. The last two orgs did nothing.

May 08, 2017 10:14 AM
Ambassador
6,392,879
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Takes a little bit of the liability off of the broker if all agree to how the em is handled.

May 08, 2017 09:59 AM
Rainmaker
1,617,916
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

that is procedure both parties must sign

May 08, 2017 09:50 AM