Quote:
Originally Posted by retiredguy123
What about the escrow company? In a typical real estate sales contract, the earnest money is held by a third party in an escrow account that does not belong to either the buyer or the seller. The earnest money is rarely ever forfeited because the purpose of it is to demonstrate that the buyer is serious about buying the house, not to be used as a threat or penalty against the buyer to force a sale. But, the broker has told the buyer that they will automatically forfeit the money if they don't complete the sale. Totally not true. What is wrong with the buyer asking an attorney to review the contract, explain their rights, and ask the escrow company to refund the earnest money? The escrow company is the decider here, not the broker. It sounds like this broker has not treated the buyer ethically or in a fair and fiduciary manner, as required by law.
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The buyer should consult an attorney if they aren’t clear on the contract. I’m not a lawyer but I don’t think the escrow company is a decision maker. They are just holding the money. At some point a decision has to be made to release it or not. If no agreement it would have to go to court. The escrow company can’t decide who is right.
You are correct that it is very rare for a seller to keep the deposit. There’s always some loophole and even if no loophole it’s difficult to keep the money. That being said the deposit is to prove the buyer is serious. But if the buyer doesn’t risk losing it then it’s meaningless. It sounds to me that the seller did what was required and the buyer should not be backing out. There could be details missing and assumptions I’m making based only on what I’ve read in the threads.