Woodstock, GA · Member since 2011 · 5 posts · 1 vote
I have a home in Woodstock GA that has been under contract twice now and both deals fell apart due to financing issues.
Deal #1 fell apart 3 weeks after closing date with some no name agency. Buyer was well past the financing contingency and all other contingencies were met. We never signed an extension.
Deal #2 fell apart 2 days before the closing date with Keller Williams. Buyer was well past the financing contingency and all other contingencies were met.
In both instances buyer's broker is not responding to my agents broker. They claim nowhere on the GAR form does it say that seller should automatically get the $1,000 Earnest Money plus their buyer spent money on appraisals and inspections (not that it matters).
My broker said we have to wait a "reasonable time" to go to an arbitrator and the buyers brokers have to initiate. We could be waiting for several months.
OR we can file a complaint with the Georgia Real Estate Commission but they are 6 months behind.
Anyone else have problems with getting the buyers EM and if so, what did you do?
I know this doesn't help you, but all of my contracts have had a contingency clause that says that I get my Earnest money back if I cannot get financing. I have always gotten financed so it has never been tested.
I have been in situations where I had to decide to give earnest money back or not. But, the escrow is always held by the closing company of my choosing. However, I have never held earnest money just so I maintain a good relationship with the buyer's broker (for future deals). I make them sweat a little first however.
Wished I could tell you what to do from here instead of what you should have done.
Good Luck
Don
Local custom rules. The EM may not be required to go to the listing broker (who may be responsible and sent to the closing agent) until the contract is accepted. If there are contingencies that are not met, financing for example, the EM may be returned unless otherwise stated in the contract. The buyer's broker is usually responsible for asking the listing broker that funds be returned. If the listing broker does not release funds from the closing agent the buyer has recourse through legal action against the seller and listing broker. This can all be structured as to local custom, but if any party fails to act in a timely manner, you may need an attorney. Specific instruction should be included in your contract as well.
The way it generally works in GA is that (unless both parties agree who gets the EM), the broker of the EM should be sending out a 15-day letter to both parties indicating who the broker believes the EM should go back to. This gives both parties 15 days to contest the broker's decision, in which case, the broker will either need to change their mind or turn the EM over to the courts to allow a judge to decide who gets it.
Your agent needs to demand that the broker holding the EM issues a 15-day letter immediately. If they determine (for some reason) that the buyer gets their money back, you need to appeal, at which point it will likely go in front of a judge.
If the broker doesn't agree to give you the EM or issue a 15-day letter, you should be reporting them to the GA RE Commission.
I've had situations like this, and it was a pain in the butt...but ultimately, when the broker realizes that you won't just forget about it and gets threatened with commission action, they will generally do the right thing.
Thank you for all of your replies.
J Scott:
This is exactly my situation "If the broker doesn't agree to give you the EM or issue a 15-day letter, you should be reporting them to the GA RE Commission."
They are both refusing to issue the 15-day letter.
In the future, would you recommend putting in a special stip about the EM or maybe have the buyer's EM go directly to my agents broker instead (during the initial contract)?
Go Here: http://www.grec.state.ga.us/consumer/complaint.html
What are Investigations
The Georgia's Real Estate License Law and Appraisal Act provides that "The Commission/Board may, upon its own motion, and shall, upon the sworn written request of any person, investigate the actions of any applicant for licensure real estate broker, associate broker, salesperson, real estate course and instructors approved by the Commission, appraiser, applicant, or school approved by the Board." The law limits the Commission's Board's investigative authority solely to issues related to the Real Estate License Law or Appraisal Act.
The Commission's/Board's investigations do not determine whether a violation of any other area of law has occurred. For example, the Commission/Board cannot settle such issues as disputes regarding earnest money, loan amount a lender may make based on an appraisal, repairs to property, or payment of fees to licensees/appraisers. The law of contracts control these issues. If the parties cannot resolve such issues themselves, they should consult an attorney or the small claims court of their county for assistance.
Anyone who files a request for investigation with the Commission/Board and has suffered a financial loss should not wait for the results of a Commission/Board investigation before consulting an attorney. The Commission/Board cannot replace a financial loss. The law allows the Commission/Board to reprimand, suspend, or revoke a license/classification and/or to impose fines, education requirements, and/or require reports from an independent accountant.
The Board may only investigate real estate appraisers or persons performing the acts of an appraiser without proper registration, licensure, or certification. It cannot take action against persons acting properly under an exception to registration, licensure, or certification requirements. The Commission may only investigate licensed real estate brokers and salespersons or unlicensed persons performing the acts of a broker. It cannot take action against an unlicensed individual who may be an owner or builder acting as a principal on his or her own property.
The public and all licensees/appraisers should understand the following facts regarding Commission/Board investigations:
When the Commission/Board initiates an investigation no one should make the inference that the Commission/Board believes a violation of the law has occurred or is charging anyone with a violation of the law. Only after reviewing the results of an investigation might the Commission/Board allege that a violation has occurred and bring charges. The Commission/Board, not the person who requested the investigation, is the Complainant in the matter.
The investigator keeps all information that he/she gathers confidential.
The investigator reports the facts gathered in the investigation but not the names of the party or parties involved. In this way the Commission/Board evaluates and judges only on the relative merits of the evidence.
Unless the Commission/Board orders a formal hearing, the name of the person requesting the investigation and all other materials in the investigative file remain confidential and closed to the public.
Consider Your Other Options
The Agency's restricted resources often make the investigative process take longer than you or the Agency would prefer. Thus, you may get quicker attention to your problem by (1) discussing it directly with the agent(s) involved or the agent's broker or (2) asking the Small Claims Court in your county to address the problem. Regardless, before, after, or during those processes, you may file a Request for Investigation with the Commission/Board.
Request an Investigation
In order to initiate an investigation, you must submit a notarized Request for Investigation form.
The issue you are having related to who is due the earnest money is a contractual issue that the GREC will not settle or look at.The issue they would look at is if you gave the letter notice and the broker was not following license law and rules and procedures.
So I am surprised this broker is not following protocol.No legal advice. Usually a letter from an attorney lets them no this won't go away.
