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Getting Earnest Money Back in California

My wife and I had an offer on a shorst sale. We waited 93 days and never heard anything so we decided to cancel the contract.. In the addendum, it states that my EMD is fully refundable. However, the sellers have not signed the release of my EMD.  How long do I legally have to wait? Also, how long do I have to wait before I seek mediation or other legal avenues? It is my understanding is that if the seller refuses to sign that I can seek a 1000 dollars. Is that true?  Can I contact the sellers agent about my EMD?
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September 15 2012 - Sacramento
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I am not a lawyer and what I am about to tell you does not constitute legal advice; however, the sellers absolutely can be fined $1,000 for willfully and unreasonably refusing to return an earnest money deposit within 30 days. You need to work with your agent on this and, if you have more legal questions, contact a lawyer.

Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
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September 15 2012
Your agent should be helping you with this. Technically, escrow will not move forward on another transaction until this one is cancelled so in MY opinion, the seller is only hurting themselves by not signing the paperwork cancelling the transaction. I have never had a seller refuse to release the funds in a short sale transaction so please get with your agent and perhaps if the listing agent is unresponsive they can then go to the broker to reslove this.
On a side note, short sales take time, so perhaps you should look at other types of sales if the time these take to process doesn't work for you. Also, I'm not sure where you got this information but Ihave never heard about getting $1000 if the seller refuses to sign.
Best of luck to you!
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September 15 2012

There is no hard law or regulation about minimum, maximum or anything in between about EMD. It's just a way for two parties to negotiate in good faith. Buyer deposits money with a neutral third firm, and from that point onwards, that firm will release money upon proper instructions from BOTH parties. If the sellers wants to be difficult about it, buyer has legal recourse through the court system. But usually EMD is resolved fairly quickly if deal falls apart (or disbursed upon closing to seller).

REA's cannot legally do anything about EMD. They may be able to negotiate, but cannot demand a return or disbursement without their principals (or attorneys) authorizing it.

Raheel Shahzad, Attorney, CPA, Real Estate Agent
Chicago, IL
*Above is not legal advice but general information; your facts and jurisdiction may be different*

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September 15 2012
They should be able to give you a timeline for when your 5K comes home. Funny how someone else's money is no big deal and will all work out. Undoubtedly, it will work out, but when and do you need the cash to make another offer?  To me, it seems ridiculous to deposit earnest money until you have a deal....especially on a short sale. Logically, earnest money should be deposited when a contract is ratified. Of course, maybe that seems obvious because that is how we do it HERE. Good luck...

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September 15 2012
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My agents say that they have to sign it and are not worried. However, they do not have 5k involved!
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September 15 2012
In Oklahoma, we do not deposit earnest money until we come to an agreement, so the EM would still be in the buyer's agent's hands. What does YOUR agent say?
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September 15 2012
 
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