How long should it take to get earnest money back?

weed30June 13, 2010

I canceled a contract on 5/24 due to several major issues found in the inspection. The mutual release was not signed by the seller until 6/8, and then not until 6/11 by the seller's broker. Now my agent has to have it signed by HIS broker, and it has to be sent to the title company, who will call me 'when a check is ready'.

I am not hurting by not having the money back, but this seems wrong on principle, and is possibly violating the law.

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brickeyee

"I am not hurting by not having the money back, but this seems wrong on principle, and is possibly violating the law."

What law?

Paperwork takes time, and each party must ensure they are performing their due diligence before signing.

Is there a time in the contract?
30-60 days is pretty standard to move money around.

    Bookmark   June 13, 2010 at 12:27PM
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sylviatexas1

Well, it *could* have been handled better;
the title company could have emailed or faxed the document to each party for signature at the same time.

but once your broker has signed it, the title company should issue your check the same day if you request it.

I wish you the best.

    Bookmark   June 13, 2010 at 2:23PM
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weed30

Thanks Sylvia, I will call them.

    Bookmark   June 13, 2010 at 11:28PM
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brickeyee

"the title company could have emailed or faxed the document to each party for signature at the same time. "

Now you get into issues about not having a sole document bearing all the signatures.

And they still have to be send paper back.

The legality of faxed signatures is still all over the place.

    Bookmark   June 14, 2010 at 10:34AM
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susana_2006

When I was in this situation, my agent immediately faxed my papers & got the seller's signature. I had my check back in a week.

I had no trouble with faxed documents in several transactions I've been involved with. I think that your agent should be doing his job and getting this money back to you immediately. Does he/she expect to be involved in the next transaction? I would consider this warning that the agent is not on the ball here.
Good luck
Susan

    Bookmark   June 14, 2010 at 9:20PM
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brickeyee

"I had no trouble with faxed documents in several transactions I've been involved with."

It depends on the state and the level of risk folks are wiling to assume.

A faxed signature on a deed is not going to go far in many places.

A faxed signature for a few thousand dollars of earnest money might be within folks risk tolerance.

A faxed signature for $50,000 might make a lot of folks squirm.

Faxed documents have been held valid in some places, but only between dedicated fax machines, as opposed to PC scanners that then create a fax.

There are also federal laws pushing 'electronic signatures' as being acceptable but it has yet to roll down to the state/county/city level in many places.

A huge amount is going to depend on the amount of money involved.

A small amount is more tolerable than tens of thousands, hundred of thousands, or even millions of dollars.

    Bookmark   June 15, 2010 at 9:48AM
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sylviatexas1

As far as I know, faxed signatures have not been found invalid;
if the title company has no problem with it (the title companies I have used never have had a problem), faxed signatures for the release of earnest money are perfectly fine.

I don't think a county clerk's office would accept a faxed or electronic signature on a deed, as that transfers ownership, but earnest money is generally easy.

    Bookmark   June 15, 2010 at 12:10PM
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brickeyee

"As far as I know, faxed signatures have not been found invalid"

They have to have been found VALID.

And non-certified copies of documents have repeatedly been held invalid.

    Bookmark   June 15, 2010 at 4:15PM
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sylviatexas1

Practices are invalid only after they've been challenged in court.

surprised your wife the lawyer hasn't told you that.

& while certain documents need to be notarized, the release of earnest money never has been one of them.

    Bookmark   June 16, 2010 at 12:04PM
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