How Long Does It Take To Get Earnest Money Back
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| I went to see a home in Hillsborough NC that I found online. The agent from redfin explained the process of due diligence & earnest money in North Carolina. I really liked the home so I gave the non refundable due diligence and the refundable earnest money based on satisfactory inspection. The home did not pass inspection, in fact the report stated there were extensive repairs needed to this home and it violated some codes-based on an unfinished room at the back of the home. I lost my due diligence I should have had the inspection first. The due diligence took the home off the market for one week. We terminated the contact based on the house not passing inspection which was written in the contract however, I am having the hardest time receiving my earnest money back from the sellers attorney. I found out that the house was not supposed to be placed back on the market until all parties had signed the termination and money was returned. The house was placed back on the market the day we agreed to terminate the contract but my earnest money was not return to me. I have been requesting my earnest money from the buying agent for a week. He says he is having difficulty receiving an answer from the sellers agent? I feel a little stiffed on the house in Hillsborough. The owner has the due diligence, the sellers agent has the house back on the market yet my money is still tied up |
09-18-2014, 08:26 AM 
? How long does the return of earnest money take? What should I do?
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| I doubt he's telling the truth because he doesn't mention what the seller's broker is saying. And he should have contacted the broker. Let him know since he has been ineffective to a point where another buyer could be damaged and there could be two deposits on a house, etc...that you will contact the broker. And if he has, you'll contact the state real estate commission. |
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| It usually takes up to 15 business days, not calendar days, as they won't release funds back to you until the money has cleared their bank and not bounced. By the way, there is no such thing as a failed inspection. Inspections are for informational purposes for a buyer. Either the buyer is ok with the work needed or not. It doesn't mean the inspection "failed". |
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| When you say, "The house did not pass inspection", what do you mean? (There is no 'pass/fail' when it comes to inspections, except, perhaps, in the mind of the potential buyer). When a buyer gets what they consider a 'poor inspection report', they typically negotiate further with the seller ... or clearly and specifically notify the seller that they are terminating the purchase offer (and the seller agrees to or signs-off on that termination). -- Since you arranged and paid for the inspection, the seller was not automatically privy to the results. Did you clearly and specifically notify them of the results and your position ... or simply 'walk away' (and potentially forfeit your earnest money deposit?) Your earnest money deposit is (should be) held in escrow and returned as soon as the purchase agreement is terminated. Instead, it sounds like the seller and/or their attorney may be disputing the refund of your earnest money deposit (assuming at least 15-20 days have passed). Read your purchase agreement -- It may be necessary to have "your attorney contact their attorney" to resolve this matter. |
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| The terms of your contract should/will dictate how long the seller has to return the earnest money in this situation. |
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| OP, It depends on the form you used to terminate. If you cannot get your agent to clue you in, get an attorney to read the contract and all addenda to you and give you an opinion where you stand. |
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| Quote: Originally Posted by nashvillebornwoman I really liked the home so I gave the non refundable due diligence and the refundable earnest money based on satisfactory inspection. My question is about the non-refundable "due diligence" fee. How much did you pay for that? I would never pay a non-refundable amount as part of a purchase offer. For those familiar with North Carolina, is that a common practice down there? Overall, it sounds like your agent was not up to par. As for the return of your earnest money deposit, make sure that you followed all of the requirements spelled out in your contract. It could be that they're just experiencing a normal delay (e.g. waiting for your check to clear)...or it could be that the Seller is going to challenge giving your money back. You need to review your contract terms quickly. |
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| Quote: Originally Posted by jackmichigan My question is about the non-refundable "due diligence" fee. How much did you pay for that? I would never pay a non-refundable amount as part of a purchase offer. For those familiar with North Carolina, is that a common practice down there? Overall, it sounds like your agent was not up to par. As for the return of your earnest money deposit, make sure that you followed all of the requirements spelled out in your contract. It could be that they're just experiencing a normal delay (e.g. waiting for your check to clear)...or it could be that the Seller is going to challenge giving your money back. You need to review your contract terms quickly. If you search the forum, NC Due Diligence and Fees have been regular hot topics. |
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| Quote: Originally Posted by MikeJaquish If you search the forum, NC Due Diligence and Fees have been regular hot topics. Wow--that's interesting. Thanks! |
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| Yeah, this whole OP was a lesson to me of the whole "different state, different norms" thing. In my area, the buyer's agent's broker holds the EM, there is no due diligence fee, and there are typically no attorney's involved. Therefore, I can't really offer anything specific, since things are clearly done very differently there than here. In general though, I'd agree with Falconhead. It takes 5 minutes to cut the check, but they are perfectly within their rights to verify that it isn't going to bounce. We always let checks sit for 2 weeks (3 is better) before releasing funds. If a property is going to close faster than 3 weeks, or if the contract dictates the money be released sooner, we always convert all funds to certified checks at the check writer's bank before depositing them, or if there is no local branch, we insist on the buyer giving us cash or money order. We learned this lesson the hard way. Back in the boom, around 2006, we had a guy write 2 contracts to buy 2 properties (he intended to buy both, not one or the other). They were new construction, and per the contract, the EM was to get released to the builder upon picking up plans and permits. So we deposited his 2 $3000 checks, and wrote a check out to the builder. The checks then both bounced. The builder refused to return the money (which was his right, I don't blame him), and the buyer ignored all attempts at communication. We were out the entire $6000 and the deals both fell apart. The buyer lived out of state, and despite getting our attorney involved, we never saw a penny of the $6000 back. So we learned to never ever do that again, no matter the situation. |
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How Long Does It Take To Get Earnest Money Back
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