Expert: Lisa Webber - 6/12/2008

Question
Recently I found a home I was interested in buying. I called the real estate agent and met up with him to discuss a contract. He explain to me that a deposit was required in order to temporarily take the home off the market so no one else would take it. He ask me did I have a mortgage and of course I didn't and he said the deposit will be put in an escrow account until I'm approved for a mortgage and I proceeded to sign the contract and make the deposit. Well needless to say I was denied by the bank and sent a denial letter. I contacted the real estate agent and he told me that he would contact the attorney for the seller so I can get my deposit back and I haven't heard from him since. Here it is almost a year later and I'm still getting the run around. Finally the attorney sent a letter stating that I defaulted on the contract and the sellers want to take 1/2 of my deposit. I said okay and haven't heard anything since. What should I do next in order to get my money back?

Answer
What you need to do is read over your contract.  You may need to take it to a real estate attorney.  Did you work with the seller's agent or did you have your own Realtor?  Your contract *should* have a financing contingency.  This means that if you are unable to get a mortgage, you will get your earnest money deposit back.  You should never, ever sign a real estate contract without a financing contingency because that is a major part of the contract, you have to be able to obtain a loan from the bank.

If there is a financing contingency, you will get your entire earnest money deposit back, you don't need to give the seller any of it.  The first page of the contract, if it is a standard Maryland contract, should state that the contract is contingent upon you getting a certain interest rate as well.

We have a real estate attorney in our office who you can call and have them read over your contract, 410-451-1900.  

If I were you, I would go right over to the real estate agent's office and tell them you need to speak with the broker or office manager.  Tell them you want them to release your earnest money deposit immediately.  The real estate agent is ignoring you so you need to go to their manager and get the money released back to you.  It is probably still in the bank account of the real estate company.  

Don't let the seller's attorney intimidate you.  They will try, but like I said, if need be, call your own real estate attorney and have them get your money back.  There is no reason that you should not have gotten your money back yet!