Relocate to Wisconsin : "The Seller Isn't Returning the Earnest Money," claimed the Agent

"The Seller Isn't Returning the Earnest Money," claimed the Agent

 In Wisconsin, if after an inspection is done, the Buyer feels that the defects  found are ones that they do not want corrected...the Buyer sends a signed "Notice of Defects" and it is accompanied by anolther document called a "Cancellation and Mutual Release."  The notice lists the defects...It is a notice..not an amendment...not a counter offer...nothing that requires the Seller's agreement.

   The Cancellation and Mutual Release is a document that releases the earnest money from the Listing Agent's trust account and sends it back to the Buyer and the Seller is required to sign it for the money to be released.


            What Happens When the  Seller Refuses to Sign the

                                          Release ?


         The Selling agent can request it...the Broker for the Selling agent can request it...If the Seller still is on to Small Claims...or as some people refer to it, "Small Brains Court."  Which is a needless waste of time and money...the Seller can't win....he/she has no legal basis not to have the money refundrefunded.   The Seller cannot sell the property to anyone else...the Agent must keep the status as "Active with Offer" in MLS until the Seller signs the cancellation and/or loses the needless court battle that can't be won.judge

    Claiming that the Seller still "wants to sell the Buyer the property" is a futile arguement...the Buyer decides to buy or not buy...the Seller has no choice.

     If you have a Seller who "wants to sell" a property...counsel him/her to do it ethically....fairly...prepare the property to be sold with "workmanlike repairs" and above all...Honor the system and the process. It is not a choice to agree or is the way it professional and do the right thing.

     Amen and Women.


Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS

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Comment balloon 17 commentsSally K. & David L. Hanson • February 23 2016 05:37AM


Sally K. & David L. Hanson It is exasperating when your best advice to a seller goes unheeded. In those cases, only a burning hole in the seller's pocket will teach him a valuable lesson when he is ordered to pay the small claims court fees.

Posted by Sandy Padula and Norm Padula, JD, GRI, Presence, Persistence & Perseverance (Realty One Group) over 2 years ago

Sally K. & David L. Hanson  Every state is different of course but what a silly waste of everyones time .Our agreements state that if the home inspection is not satisfactory the buyer is not obligated under the terms of the agreement of sale  if they give the seller written notice within a specific time frame to call the agreement null and void and all the deposit monies shall be returned to the buyer .

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) over 2 years ago

Fascinating bit of Real Estate which proves this is not a game. Threatening to lien the property does wonders in my neck of the woods

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 2 years ago

How frustrating to have such uncooperative seller. Some people are their own worst enemies.

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) over 2 years ago

Some people want to play the waiting game on signing the release even if do not wantto go to court.


Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) over 2 years ago

What a waste of time. Sellers would be foolish to do this...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Condo & Home Sale Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) over 2 years ago

Your system is a bit different from ours. The contract can be cancelled with all sign-offs, but the return of earnest money is a separate document. We can always go the County Clerk to approve refund of money... it's a pain, but at least "gets rid" of a pesky seller who won't sign an em release.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (RE/MAX Executive | Charlotte, NC) over 2 years ago

Interesting Sally...our escrow amount if contested has to go to our RI Department of Business Regulation where they duke it out.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) over 2 years ago

Hi Sally.  In Massachusetts the seller has to sign the release of deposit doc.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) over 2 years ago

Sally sounds like a big waist of time for the Seller all the way around if they do not realize the Earnest Money, especially the time they waist not being able to put the house back on the market.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 2 years ago

Sally and David- very short-sighted of the seller.  And it's interesting to read how things are different across the states. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) over 2 years ago

Sally K. & David L. Hanson ,  this sounds like a terrible waste of time. Eventually, they will have to give the money back.

Posted by Annelle Tubb (Complete Home Inspections, Inc.) over 2 years ago

This is really clear S&D.  Not sure what the disagreement would be!

But, my kids really liked the Ernest movies - 'Ernest Goes to Town,' 'Ernest Goes to London,' etc.  Maybe if the buyer saw the movie 'Ernest Goes to Notice,' it would help?

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 2 years ago

Yes Jay Markanich ...Ernest will be meeting the process server to learn what the new story "Ernest Goes to Court" looks like

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (Keller Williams 414-525-0563) over 2 years ago

Hi Larry and Sheila.  In Florida, if the broker is holding the funds, the Department of professional Regulations can order a return of funds after review of the case.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 2 years ago

This is a good story to share. Agents and their clients need to understand good business procedures and practices.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) about 2 years ago

Holding the funds get no one nowhere. Keeping the property off the market  does not get it sold.

Posted by Peter Mohylsky, Your Bucket List Broker along 30a (BETTER HOMES AND GARDENS REAL ESTATE) about 2 years ago