agent in Illinois won't return my earnest money, what to do??

Kansas City, MO · Member since 2012 · 11 posts · 0 votes

had a commercial property under contract in February, decided not to purchase within
due diligence time period, sent him a letter.
It's been more than 2 months and no response at all!
He is one of KW realty, listed as broker.

any ideas?

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Real Estate Investor · Palos Heights, IL · Member since 2011 · 44 posts · 28 votes

13y

Real Estate “Agents” no longer exist in the State of Illinois. You must be licensed as either a “Broker” or “Managing Broker”.

Check the Illinois Department of Financial & Professional Regulation’s license look-up webpage to see if he is licensed as Broker or Managing Broker. Here is a link:
IDFPR License Look-up

If he is a Broker, than he must be sponsored by a Managing Broker. The IDFPR site gives you the name of his Managing Broker (aka “Sponsor”). The Managing Broker is responsible for holding earnest money deposits, so he or she is the one you need to contact.

The “Agent” classification was eliminated in Illinois last year. All real estate agents were required to take a Broker’s class & pass the Broker’s Exam or let their license expire. If this guy is still doing business with an expired Agent’s license, that is a whole different issue.

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
More info. Does realtor have a response. Did you talk to the branch broker?
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James Willson
OP
Kansas City, MO · Member since 2012 · 11 posts · 0 votes
13y
no response at all. In Illinois, you have to have attorney involved.
They do all the communication. I have not talked to the branch broker, not sure if there is one.
My attorney sent him a couple of letter regarding my earnest money. He said he's not getting any response.
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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
13y
Cal the Broker. All commercial agents call themselves brokers but technically, most are not brokers. The broker is essentially the head agent at a brokerage.

If the broker doesn't return your call go the the state real estate commission.

PS I just now see your response. yes sick the attorney on him but also go to the real estate commission.

In MD and perhaps where you are the RE commission has real guts and can inflict pain on an agent or broker. They may have a fund to allow you to get your deposit and then they bill the broker.
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Ibrahim Hughes
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
13y
Go into their office and threaten to contact the BBB and state real estate commission. Brokers/Sales agents try to avoid being brought in front of them whenever possible. Also consider contacting the corporate office of KW.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
Sorry James to hear of your troubles. I never let the other party hold earnest money.

Either my clients attorney holds the earnest money or the independent title company holds it. The seller or their reps I never allow it.

If I was on the listing side for my client I believe a fair solution is to let the title company hold that I snot sided to either party.

What did your agreement say?? Are you paid interest on the escrow account for the EM or is there any?? If there is it has to be disclosed how much and who it goes too.

Was the seller a bank?? If so they can take forever to return the money sometimes.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
"It's been more than 2 months and no response at all!"

James there is no way I would wait that length of time to take swift action. Did the seller sign off on the termination agreement?? If they did a return of the EM usually takes about 1 week depending on how they mail it.
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James Willson
OP
Kansas City, MO · Member since 2012 · 11 posts · 0 votes
13y
That's what I hear Joel, usually a week.
I never had this problem before and since it was out of state, all I could do is call my attorney to ask if he heard anything and just wait. I just emailed "the leader" from his office's website, thinking it's probably head broker. I'll keep it updated if I hear anything back.
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Jeff Cook
Real Estate Investor · Atlanta, GA · Member since 2013 · 27 posts · 1 vote
13y
James,
Contact the Illinois Secretary of State Police. They are the ones that enforce regulations for state licensed professionals including real estate agents. There is a local office in your area.
Jeff Cook
Founder - Newopolis
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Account Closed
Real Estate Investor · Palos Heights, IL · Member since 2011 · 44 posts · 28 votes
13y
Real Estate “Agents” no longer exist in the State of Illinois. You must be licensed as either a “Broker” or “Managing Broker”.

Check the Illinois Department of Financial & Professional Regulation’s license look-up webpage to see if he is licensed as Broker or Managing Broker. Here is a link:
IDFPR License Look-up

If he is a Broker, than he must be sponsored by a Managing Broker. The IDFPR site gives you the name of his Managing Broker (aka “Sponsor”). The Managing Broker is responsible for holding earnest money deposits, so he or she is the one you need to contact.

The “Agent” classification was eliminated in Illinois last year. All real estate agents were required to take a Broker’s class & pass the Broker’s Exam or let their license expire. If this guy is still doing business with an expired Agent’s license, that is a whole different issue.
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Elmer FosterPro Member
Real Estate Agent · Pembroke Pines, FL · Member since 2013 · 22 posts · 10 votes
13y
I am not sure of how it works in Illinois, but in the state of Florida, you have to sue to get the earnest money deposit released. No party of the contract can take the deposit without the other party's consent so if the broker will not return the deposit you may need to go to court to get the court to order the release of your funds. I would also contact the licenesing board to file a formal complaint. If the broker is holding onto your money, he/she may have illegally appropriated your funds and no longer have the funds to return to you. Sounds like you did not submit the offer through a realtor. I am a realtor and I always recommend buyers work with a realtor. That realtor represents your interest whereas the listing agent is looking out for his own pockets.
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Account Closed
Orlando, FL · Member since 2013 · 165 posts · 62 votes
13y
If some Realtor had my escrow deposit, I would start by demanding by U.S. mail that they return it to me. Then I would turn in a complaint to the Florida Department of Business and Professional Regulation. That is the people that issue Florida real estate licenses. I am sure there is an equvalent in your state. It is funny how quickly real estate agents respond to Mr. Investigator.
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James Willson
OP
Kansas City, MO · Member since 2012 · 11 posts · 0 votes
13y
Thank you for the input guys. I did email the managing broker, she did not respond. This was in Illinois, my attorney first told filing something though the state against property(I understand that he means something like lien.) I talked him again and since it's not the seller who's not returning my money, we couldn't go that route and suggested filing a complaint through Illinois Department of Financial & Professional. I just did so and will update here if I hear anything back.
Also he shows licensed as broker, did contact his managing broker at KW, no response so far, it's been 2 weeks since my email.
ps. this is very time consuming and I am getting frustrated. Any other quicker way to get my money back guys?
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Raymond B.
FL · Member since 2009 · 2k+ posts · 357 votes
13y
James Willson,
2 Weeks since you sent an email to the managing Broker.
Have you tried calling that person?

Raymond
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Get the managing broker on the phone. They have your deposit(or is it a different brokerage) and it's their license at risk. Emails sometimes, like faxes, can go off into the twilight zone.
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Joe Liu
Beaverton, OR · Member since 2013 · 56 posts · 9 votes
13y
I would definitely call the principal broker of that office, leave him a voice mail if they don't answer and even personally show up in the office. It is unlikely that the principal broker of that office would keep your EM just to keep it and risk all the back lash. You should contact the state real estate agency and file a complaint, but worse case, you can always leave the scariest message for voicemail - "if you don't call me back in 48 hours, I am contacting the local news crew and telling them how KW refuses to give me back my deposit". The news would love nothing more then a fraud story coming out of a real estate agency. I usually say lawyer, and I get calls back instantly (this is from a car insurance issue I had a while back) but the same should work on a brokerage since that would be devastating to the brokerage. The emails alone, they will just claim that they never got them and they don't check there junk mail folders.

Good luck!

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James Willson
OP
Kansas City, MO · Member since 2012 · 11 posts · 0 votes
13y
update,
so I finally got a hold of managing broker, talked to her a couple times+few voice mails. She wanted some type of formal cancellation letter from either my attorney or agent. I contacted my attorney immediately was told that he faxed it to KW office. I call the managing broker next morning, she says she never got it.
So I'm in the middle just going back and forth between the broker and my attorney.

First of all, it is very disappointing that how little my attorney can help me. You would figure they are going to do something drastic but that hasn't happened.
I also filed a complaint through Illinois Department of Financial & Professional online. No response yet.
EM is not a huge amount but significant enough for me, I thought about contacting different attorney for this matter but with their fees being so high, I'll probably come out upside down.

What are your thoughts?
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Timothy W.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
13y
Who is it?
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Natalia B.
Horseheads, NY · Member since 2013 · 5 posts · 1 vote
13y
When the deal "falls through", buyer obtains a release letter from the bank, which was supposed to do financing (if the reason for "no deal" was financing), or presents bad inspection report, or points to whatever contingencies you had in your contract - you must have a reason not to buy a property. If you just decided not to buy the property, you'll never see your deposit. You can't write a letter saying - I decided not to buy the property - you are in a legally binding contract, this is no jokes. Long story short - especially if the escrow is hold by a third party - the money cannot be released back to you unless both parties sign the release form. No exceptions. So, gt your release paper and fax it to the Team Leader of that Market Center of KW.

The only way in this situation, besides the release letter, is to get an attorney and proceed through him/her. If you didn't apply good effort to purchase the property, you'll never see escrow money back. Both parties must release the escrow money, and there must be a SOLID REASON for not proceeding with the purchase, i.e. inability to secure financing, bad condition of the property as per inspection, loss of employment, etc.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Natalia, not necessarily. Most inspection contingencies or due diligence clauses don't require any valid defect to cancel the contract within the stated period. This, of course varies depending on the contract used in different regions.
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