Market Wise Q&A from the SJMN: Can The Sellers Keep The Buyer's Deposit?
Pat Kapowich for the San Jose Mercury News Q: I just received a Release of Contract form faxed to my work and the cover sheet states, “Sign The Release NOW.” This comes as a total shock since I thought we were closing the sale out very soon. I invested with some friends in a single-family home, which we wound up selling in the dragged-out Short Sale process. One of my partners who dealt with our listing agent often told me everything is under control during the six-months of this transaction.
After I calmed down I realized we can keep their deposit, only to find out there was never a deposit in escrow, which make me absolutely furious. I remember asking if the deposit got into escrow within the 3-Days, as the contract stated, and was told by my partner that that was the case, as our Listing Agent told him so. We did receive a copy of the buyer’s check. I think the bigger issue here is that this is a violation of the Trust Fund law. Correct?
A: That would be for a real estate attorney to answer after he or she has reviewed your file. In the meantime, you could call the Department of Real Estate, which has a very helpful staff that now specializes in sloppy and/or shady choices made by licensees. Take a look at your mandated Agency Disclosure form, if you received one, describing each agent’s duties. The buyer’s agent violated the “honest and fair dealings,” while the listing agent breached the “reasonable skill and care,” obligations. Fighting over a deposit is not uncommon. However, a dispute over no earnest money deposited will focus on the agents, and justifiably so.
E-mail questions to Pat at SiliconValleyBroker@gmail.com
Pat Kapowich. Broker/Owner ABR, CRS, GRI & SRES (408) 245-7700