A RealNews reader asked “How do I get the earnest money returned from a Realtor in Missouri?” There are a couple of answers that would apply essentially anywhere, not just in Missouri, and then some specific information for Missouri.
First, to get the earnest money disbursed to you, whether you are the buyer or seller, you have to be entitled to it under the terms of the contract. Review the contract, with legal counsel if necessary, and make sure you held up your end of the bargain and that you’re entitled to receive it. It never ceases to amaze how often a buyer, represented by a buyer’s agent who should know better, will ask for the return of earnest money when the buyer clearly breached the terms of the agreement. And, not surprisingly, seller’s and their agents are equally likely to expect to receive earnest money when a buyer backs out, even though the buyer backs out precisely because the seller has done something in violation of the agreement. So, first step is do your part correctly. Second step is ask for the money to be returned.
In many places, even where it’s not required, the broker will not disburse the earnest money until both parties sign a release. The release may specify that both parties are agreeing the contract is terminated and that the return of the earnest money signifies both parties satisfaction. At the least, the release will likely absolve the broker from any liability to either party for the disposition of the earnest money. Even if it weren’t required, I’d want both parties to agree that I was handling the funds correctly, no matter what they thought of the transaction otherwise.
In Missouri, disputed earnest money is now turned over to the State Treasurer.
Whenever the ownership of any escrow moneys received by a broker pursuant to this section is in dispute by the parties to a real estate sales transaction, the broker shall report and deliver the moneys to the state treasurer within three hundred sixty-five days of the date of the initial projected closing date in compliance with sections 447.500 to 447.595, RSMo. The parties to a real estate sales transaction may agree in writing that the funds are not in dispute and shall notify the broker who is holding the funds.
So, the answer for the reader, who was from Missouri, is quite simple. If both parties don’t want to sign off on the return of the earnest money, you’ll need to wait the required time (up to 365 days), then apply to the State Treasurer for the return of the earnest money.
Before 2003, in Missouri, real estate brokers would disburse the funds according to their best judgment after a short time unless court action was initiated, in which case they would release the funds to the court. Other states may have similar provisions to either the old or new Missouri requirements, but most should allow for the funds to be disbursed if all parties agree in writing.
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