Mutual release from a real-estate transaction?

Question

I purchased a house and about a week before closing I was told that the house that we bought had liens on them. There were number of creditors who had put the liens on the house (not one). The seller allowed me to move in without signing any paperwork on the hopes that the liens could be lifted and the transaction would go through. However, two weeks later, my lawyer informed me that he didn't think that the liens would be lifted and that he wanted me to move out and purchase another property.

To walk-away I need to have the mutual release form signed so that my deposit (20K) could be returned to me. However, the seller has apparently dissappeared and I'm unable to get the mutual release done.

What are my options? The contract is void as the house did not close. Why is my deposit stuck? I've been told that I need to contract a litigation lawyer to my deposit released which is more $$ out of my own pocket and I'm trying to avoide.

Answer 1

Real estate agencies will not (and cannot) unilaterally return an earnest money deposit to a buyer OR a seller. Agencies are bound to hold the deposit in their escrow accounts until a mutual agreement (signed) is provided, or until a court of law decides who should get what.

I'm going to tell you what you don't want to hear. Hire an attorney as soon as possible to pursue action. With the events which you describe, chances are that the seller won't show for the court action, and you will be awarded a judgment by default. Even if the seller DOES show up, his case to keep the earnest money is weak to non-existent. Once you have the judgment, the agency will be free to return your deposit.

(The first respondent is correct. I HOPE that your earnest money was deposited in a neutral escrow account. If you gave it to the seller, GOOD LUCK !)

Answer 2

Mutual Release Form

Answer 3

You are in trouble if a third party was not holding your funds. A mutual release is signed by both parties, releasing you both from the contract. I sure hope you get your money back.