Rental Property Investor · Where we are parked · Member since 2013 · 584 posts · 178 votes
Anyone doing business in the Milwaukee area, please beware of ALM Realty.
We were in contract on a property and had submitted our earnest money deposit. We decided to cancel the contract prior to the contingency period expiring for a number of reasons, primarily that we had not received the rent/lease documentation from the seller within the allowed period of time.
The seller was upset that we cancelled the inspection and contract and is now refusing to return our EMD. Our agent had been unsuccessful in getting the seller to cooperate so I contacted the agency directly and they have been extremely rude and are questioning why I should get the deposit back.
I would recommend looking elsewhere if you're considering using this agency.
I can't guarantee this will be the same in other states, but in North Carolina, as a buyer it is always in your best interest to have an attorney - not the listing firm - hold your earnest money/escrow. A real estate firm cannot release the earnest money unless the seller signs the proper form to release it per real estate commission rules.
Attorneys, however, are not bound by real estate commission rules and can release earnest money without the seller's signature, and typically have problem doing so in a case where it's clearly due back to the buyer.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
As for being rude, and questioning your "right" to the EM (assuming you're correct) they are out of line. But, depending on State law, they probably don't have the unilateral right to release it without the seller signing. It's a common problem. Here in FL, if the EM is with a title co. they can't release without both parties agreeing. The only solution is for one of the parties to file suit. A RE broker is in the same boat, except they can request a Deposit Dispute Resolution Order from FL FREC, and with statements submitted by both parties, they can release the EM as per FREC's decision. Either party can still sue each other though, after the EM is distributed, but the Broker is relieved from liability.
Broker, Investor, Property Restorer · Fox Point, WI · Member since 2012 · 288 posts · 120 votes
11y
As a Realtor in the same area, I can say that generally it is common practice around here for the seller's agent or broker to hold the earnest money in their trust account and I've never had a deal where either side requested that an attorney hold the funds in their trust account instead as @Aaron Peeler mentioned, but I can't imagine for myself at least, having any objection to that if someone did request it. So, I suppose that's good advice for next time, but I sure don't like hearing that someone is doing that here, it gives a bad name to all of us realtors in this area! I've heard their name before and just looked them up on the mls, but the little bit I remember was that I'd seen that name listing various REO's before and it looks like at least currently that's a lot of their business.
I've been annoyed for quite a while at the lack of concern that so many realtors in this area who one way or another keep getting REO listings seem to have, very often there's a HUGE difference between trying to contact a broker on some REO listing vs on a normal "retail" listing. Usually when I'll call, email, text or whatever on a retail listing, they'll answer their phone or respond very quickly to a text or email, but on REO's I've just learned not to expect much! (and I don't even if your deal involved an REO or otherwise distressed sale or not) I'm guessing that they'll get the "REO hookup" one way or another and just figure that part of their biz is simply a numbers game and leave it at that. I've also noticed how while most REO's always need some work, look rather dingy, etc that when I do come across that rare one which is actually in fairly nice or even real nice shape, that they'll still do their standard "just a very few crappy, out of focus pictures and little or no details" listing for those, just like the dumpy ones. (and I understand 100% that if its a dump, you don't want to emphasize that fact with 25 clear pics!) So, what would probably really get noticed immediately if it said "Hey this is an REO, but its really nice and still at an REO price!" just languishes on the market because a bunch of potential buyers who otherwise won't consider some dingy house at any price will never even bother looking, even just online.
The part about them being rude on the phone when you have a legitimate issue, even an urgent one is also annoying as hell and very unprofessional, but of course it is not illegal. I have a few ideas, so I'll PM you after this and explain, but that's so stupid and shortsighted because here in WI, as in I'd assume all 50 states, if either side misses one of the contingency deadlines, that nullifies the contract and that's not some WI Realtors Assoc. rule or anything like that, its just plain old contract law!
Broker, Investor, Property Restorer · Fox Point, WI · Member since 2012 · 288 posts · 120 votes
11y
Its weird, I've never had any trouble sending PM's here on BP, but it wouldn't send it to you and I'm darn tired, its 3am here and I've got a busy day tomorrow, so I just emailed it to the eric@this couple is going to buy your house.com or whatever exactly that domain name is. (nice website too! For being simple and straightforward, its well done and gave me the impression that you were easy to work with for someone looking to sell quickly)
Real Estate Broker · Jacksonville, OR · Member since 2009 · 199 posts · 155 votes
11y
If you terminated your contract within your contingency period, specific to the named contingencies, I don't see why you would not get a refund of your earnest money. Have your broker draft a termination agreement, that also addresses the refunding of the earnest money (on the same document). The Seller should be motivated to sign a termination so they can get it back active on the market to get another buyer under contract.
I promise the Listing office wants to get rid of you and on to the next Buyer, so they are likely dealing with a Seller's refusal to refund your earnest money. We cannot force clients to sign.
Sometimes Buyer's agents forward a termination that does not address the earnest money in the same document. Although typically okay, this can be a mistake because you want to disable their ability to put it back on the market if their is an earnest money dispute.
In negotiations such as this, you need to know where your leverage is. YOUR leverage to negotiate an earnest money refund is: if they are going to keep your earnest money, you can keep them obligated to you until your contractual close of escrow date. Your Agent should have some advice about how to proceed, and I am guessing it is not going to include contacting the listing office directly.