Do you have a contract? The contract typically allows you the opportunity to inspect and the option to terminate if the property is not what you expected. If you don't have a contract, you should really consider using a REALTOR next time that understands the law and can protect you.
Sounds like you had already initiated the wire transfer prior to the text, but regardless none of us have read your contract so we can’t give you a definitive answer. However, most contracts have contingencies in them (i.e. inspection, financing, etc) that would still allow you to cancel the sale. Does yours?
Who did the wire ?
Where is the rectified cancellation contract? It is up to sellers now.
Good luck getting it back. I had buyers "back out" on a contract after they got a commitment, appraisal was done, inspection done, and everything was ready to close. That EMD is still sitting in a bank somewhere and will likely not be moving anytime soon.
I am not sure of the timeline in your post. You have an agent a check, yet you mention a wire transfer? If you handed over EMD and a signed contract, you need to read your contract.
Originally posted by @Paul Vaughan :
All good and usful information. My view is simple if i handed you EMD for a house (signed purchase agreement etc), then drove around the corner & came back to you and said "I wish to cancell". You could not have transfered any $ yet. Are you no obligated if not based on Professional ethics to give my check back to me/a seller? 10 hours or two days later, I'm toast. If not mediation/arbitration then in court i should prevail.
No. The opposite is in fact true. You sign a contract, that EMD in most states has to be deposited per law, and then you have to work through that states release laws. Not depositing an EMD is a criminal offense in every state I do business in.
It's not a matter of finding a lawyer that "understands contract law". It's a matter of finding a lawyer who is willing to "be hired to fight your side of the issue".
I have no idea what your contract says and I have no idea what local customs and laws are. I do know that if you signed a contract that the "EMD was non refundable" and they had a process where the ball started rolling (IE a digital imprint of the check is sent to the secretary, who in turn emails it to billing, who follows process 42.....) Then a very real counter argument could be "Nope, nobody could have purchased it because once the email is sent then the property is automatically removed from the system so no other checks can be processed".
You can insist you are right and everyone else is wrong, their experience or assistance is not what you want to hear. So instead of using that information to help you get your money back, you are fighting people on the site. Well none of us have your money. So sure, you are right. The money is as good as in your bank now.
If someone on this site was asking questions, I would recommend they see if they have outs in their contract. If so I would use one of those as opposed to arguing up the EMD tree. But to answer your initial question, In my area you would need to use a form to cancel, verbal and text messages are not "the way to cancel a contract". Ours actually has lawyers acknowledging they can use email instead of fax. I am pretty sure not one of them here would accept a text message as a signature on a cancellation document.
Is it common for an agent to send EMD vs doing it yourself ? The deals I've done I just went to the bank and did it (could even do it online myself).
@Paul Vaughan & the Bigger Pockets Community,
Paul who was a licensed appraiser for 30 years came into our office before he ever received a wholesale property to go over the contract, addendum and all the terms of our agreement, and even went home with an example copy of the paperwork. A couple of days later Paul received an email about an available property in Carson, CA and immediately contacted our sales agent letting him know that he wanted to purchase the property. We sent Paul a purchase agreement, with the addendum stating that this is an as-is sale and if the buyer fails to perform his EMD will be held by the seller as liquidated damages. Paul Signed the contract and deposited the Earnest money check the next day at the property showing and escrow was opened up immediately. Paul also signed a Contingency removal removing all contingencies, buyers inspection Advisory, & Release of EMD amendment. Two days later Paul signed and acknowledged our original seller's transfer disclosures. Paul filled out financing applications with multiple lenders and then chose Orchard funding who is a reputable hard Money Lender in our market. Paul had the lender send loan documents to escrow, ordered an appraisal and scheduled a time to close. He arrived at the escrow office to close and tried to negotiate loan terms with the lender at the closing table and walked out of his closing appointment, Paul scheduled another appointment to close with escrow and never showed up. Paul wasted a ton of the lenders and escrows companies time and eventually cost us the deal which led to a loss for our company.
We handled everything professionally and ethically throughout this entire transaction providing Paul with multiple opportunities to perform on his contract including a small price reduction which he accepted.
We are not in the business of taking peoples earnest money deposits in any situation but we can not afford to lose money on deals because potential buyers think that legally binding agreements do not apply to them.
I hope this clears up the confusion of Paul's complaints on this thread & I'll be happy to update everyone after we litigate this dispute.
@Dek Bake You must have majored in Drama (True Thespian)
“How about a round of applause”...Mr Bake, You were so belivable when YOU told me (long before all the docs, escrow etc) that “I don’t want to keep your money...“twice! Since you knew then Joey had acted inappropriately in addition to keeping this house from other Agents (high comm i guess), Remember? Review your convo sheet. I was stunned when you changed your mind. And, then text me
“It sounds like flipping homes might not be the best profession for you it seems like you gravitate towards the negative and look at the cup half empty instead of half full”
So, here we have a COO questioning a first time investors personally and knowledge of the Carson real estate market when the issue is/was Joseph Keane under his management misdeeds. You know i was open to looking at other properties. And, we know that sales price was too high as You sold it for $430k. Soon after.
Appears You did have other investors... This house has major external obsolescence issues! So did the “real” comps, not the sales you and Joey tried to streer me towards.
After that Alex, Joey et al coerced signature here & there. ”it is the only way you might get your money back...”
“October Surprise” You need 60k to close, not the 40k (+\-) Joey & your lender told me (Bo @ Orchard Funding).
See you at Compton’s courthouse, soon.
Technology does not lie.
BP ppl No one would/should keep a clients check after a cancellatin within 10 mins!
Called Joey, text him, emailed him & called Joyce @Shallimar to confirm-no official escrow should have been opened. It is a violation of Ethics, public trust, reputation etc?