When a buyer cancels because he is tired of waiting to get the deal closed, is that a legitimate reason not to close? Look at your contract because that's what will govern his losing his EMD or walking away simply because of buyer's remorse and not forfeiting his EMD…

The types of problems that we are seeing more increasingly are –

EMD (Earnest Money Deposit) claims are becoming the center of failed deals more than ever. It seems like it is clear if a buyer defaults that an EMD is due to the seller.

However, we are seeing more conflicts with trying to get paid these EMDs by closing agents not abiding by the language in our contracting that was agreed to by us and the buyer.

The real issue behind a closing agent not releasing an EMD is he can get sued by either or both parties to the transaction. The cost of the lawsuit outweighs the fees he made on the closing so he suddenly becomes "static" with who should get the EMD.

Some of the closing agents reply with "Get a court order and I'll release the funds." That implies they expect you to sue for the money. If you are using a FAR/BAR contract, it requires you go to mediation with the loser paying the costs.

If you get that response (court order) from a closing agent – send him an email and maybe even a certified letter to "Immediately deposit the EMD funds in question into the court registry." The closing agent is liable for the escrowed EMD and if he already released them back to the buyer, he could have a very serious problem with his license.

The closing agent's responsibility is to fulfill the terms of the Purchase and Sale Contract, not interpret if one side or the other is correct. That decision is for mediation or the courts, to decide.

Don't be intimidated by closing agents who tell you what they are going to do, they should be doing what the contract says. If the contract says to release the EMD then that's what should happen – theoretically.

But here is the unseen part of this dilemma; the closing agent goes to his title insurance underwriter and asks his representative about releasing the EMD assuming you have the language similar to what our Students use. The title company doesn't want a lawsuit and says, "Don't release it unless both parties agree in writing."

What are the chances of the opposing party (the buyer) agreeing to give up his money – very small to none. However, it can happen but always expect the worst that he won't sign anything.

So what should you do? Press for the funds to be transferred to the court registry to see if the closing agent even has the money and let him know you want your money.change your life mentoring click button j 300x236 1

Look into the mediation process and make sure you have a case – the language in your contract is what should prevail in mediation or in court, not the feelings or change of heart by the buyer.

The assumption here is the end-buyer didn't come to closing on your A – B and B – C closings. But what if the original seller (A) decides not to close? Houston, you have a problem unless your contract clauses specifically address this issue of the original seller not closing.

The end-buyer may not be understanding of your seller's problem and sue you for breach of contract. The issue is to prove a monetary loss but the cost of the litigation can be expensive – even if you prevail.

To your limitless success,
Dave Dinkel

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.

When a buyer cancels because he is tired of waiting to get the deal closed, is that a legitimate reason not to close? Look at your contract because that's what will govern his losing his EMD or walking away simply because of buyer's remorse and not forfeiting his EMD…

The types of problems that we are seeing more increasingly are –

EMD (Earnest Money Deposit) claims are becoming the center of failed deals more than ever. It seems like it is clear if a buyer defaults that an EMD is due to the seller.

However, we are seeing more conflicts with trying to get paid these EMDs by closing agents not abiding by the language in our contracting that was agreed to by us and the buyer.

The real issue behind a closing agent not releasing an EMD is he can get sued by either or both parties to the transaction. The cost of the lawsuit outweighs the fees he made on the closing so he suddenly becomes "static" with who should get the EMD.

Some of the closing agents reply with "Get a court order and I'll release the funds." That implies they expect you to sue for the money. If you are using a FAR/BAR contract, it requires you go to mediation with the loser paying the costs.

If you get that response (court order) from a closing agent – send him an email and maybe even a certified letter to "Immediately deposit the EMD funds in question into the court registry." The closing agent is liable for the escrowed EMD and if he already released them back to the buyer, he could have a very serious problem with his license.

The closing agent's responsibility is to fulfill the terms of the Purchase and Sale Contract, not interpret if one side or the other is correct. That decision is for mediation or the courts, to decide.

Don't be intimidated by closing agents who tell you what they are going to do, they should be doing what the contract says. If the contract says to release the EMD then that's what should happen – theoretically.

But here is the unseen part of this dilemma; the closing agent goes to his title insurance underwriter and asks his representative about releasing the EMD assuming you have the language similar to what our Students use. The title company doesn't want a lawsuit and says, "Don't release it unless both parties agree in writing."

What are the chances of the opposing party (the buyer) agreeing to give up his money – very small to none. However, it can happen but always expect the worst that he won't sign anything.

So what should you do? Press for the funds to be transferred to the court registry to see if the closing agent even has the money and let him know you want your money.change your life mentoring click button j 300x236 1

Look into the mediation process and make sure you have a case – the language in your contract is what should prevail in mediation or in court, not the feelings or change of heart by the buyer.

The assumption here is the end-buyer didn't come to closing on your A – B and B – C closings. But what if the original seller (A) decides not to close? Houston, you have a problem unless your contract clauses specifically address this issue of the original seller not closing.

The end-buyer may not be understanding of your seller's problem and sue you for breach of contract. The issue is to prove a monetary loss but the cost of the litigation can be expensive – even if you prevail.

To your limitless success,
Dave Dinkel

Frequently Asked Questions

1. What Should I Do If a Seller Ghosts Me?

If you feel you have been ghosted, act decisively and quickly. If you have tried texting and calling, it's time to drive by the seller's location. I always take the recorded Notice of Interest or Memorandum of Contract to leave, so the seller knows it exists. Go by at a time when you know they will be there and don't be confrontational, just get the facts.

In our experience with new investors, the chances of losing a deal with no contract is likely over 85%. Verbal commitments do not apply in contract law; get everything in writing, especially contract changes.

Different 'gurus' have different opinions, but our experience is finding motivated sellers and then a buyer for your deal. Ideally, you should be finding motivated buyers from day one, so you are ready when you find a seller. Buyers are easier to find as you can see at https://davedinkel.com/products/

Prevention only comes about by thinking a Black Hat wholesaler will be coming after your deal. First, educate the seller that an unscrupulous investor may come by and illegally offer more money, have the seller sign your "Notice to Homeowner," stating that he understands he cannot accept another offer.

There is nothing illegal about changing their mind, it is called seller remorse and occurs about 25% of the time. However, if they have signed your contract, it can't be cancelled for any reason unless acceptable to the investor/buyer.

If price is an objection, you need to find out how important it is to sell fast and for cash. If the seller isn't under a time constraint, has a money issue, or has a personal dilemma, he may not agree to the price you need. Offer to help move and build it into your price before you make your offer. However, never give the seller money; only pay the moving company, and only after closing (escrow with a closing agent). If fear is the seller's issue, break it down into what the real problem is and answer their objections one at a time.

You can get to the root of motivation for a seller by asking a few questions. First, "Why are you selling?", "How soon can you close?", and Are you ready to sign an AGREEMENT today, if not, what do I have to do to make you comfortable?'. The answers to these questions will determine the truth about your seller's motivations.

The best times to involve your attorney in your deals are to have him review your contracting, review the signed contracts from the seller and end buyer, have him open escrow and start the title work, negotiate with city or counties for lien reductions or mortgage payoffs with lenders, and to close the transactions." Your attorney is not the adversary; it's the opposing party's attorney who is a deal killer, and having your attorney allows him to help overcome this obstacle.

The key to successful prospecting and bringing back deals that didn't close is to follow up until the property is transferred in the public record. Some of our deals have been where the seller came back to us months and years later because they felt comfortable with us and not the other "pushy" investors who contacted them.

Your contract's most important clauses are inspection period (as long as possible), when the EMD must be deposited if at all, your ability to access the property, any added clauses specific to the property that will protect you against seller claims later that were verbal only.

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.