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Ask Irwin Law Your Own Question
Irwin Law
Irwin Law, Lawyer
Category: Real Estate Law
Satisfied Customers: 6855
Experience:  Lawyer- Broker 30+years - foreclosure, short sale, liens, title attorney.
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If the buyer cancel the purchase contract by financing

Customer Question

if the buyer cancel the purchase contract by financing contingency but seller refuse to release the earnest money even though on the amendment to the purchase contract it says seller will release the earnest money. Now the buyer has provded everything including the loan denail letter, if the seller still does not sign the earnest money release form what can we do to make them release the earnest money?
Seller is trying to get compensated for his loss time but the buyer does not agree because the buyer was trying everything she can and go by the contract to try to get the loan but couldn't.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Irwin Law replied 1 year ago.

Hi Kenny: As a last resort, you will have to sue the sellers And have the court order The escrow agent to refund your earnest money. This is usually done in a small claims court without a lawyer. Sometimes the escrow agent will make the decision to refund the earnest money because they know that they will be involved in the lawsuit. Some states have a statute where the escrow agent can send the sellers a letter telling them that the agent will release the money to a buyer or seller unless the other party files suit themselves. That usually works because the other will not want to loose more time and money by going to court when they know that they do not have a case. I don't believe that Hawaii has such a statute. The agent will know for sure.

Customer: replied 1 year ago.
I think the agent does not know if there is such statute where can we find out if such statue is available? and because the earnest money is 10,000 dollars not sure if we can use the small claims court. i read a bit on the hawaii small claims court it seems the amount of money invovled has to be less than 5000 USD ?
Expert:  Irwin Law replied 1 year ago.

I agree. $10,000 is more than most small claims jurisdictions. Your agent should know the statutes that apply to earnest money deposits. I was unable to find one using an on line search. It may be an administrative regulation governing real estate brokers, so call the Hawaii Real Estate Commission. https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=hawaii%20real%20estate%20commission. Other than that, you will have to consult a local real estate attorney for the answer.