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Are buyers entitled to refund of earnest money if financing falls through under TX real estate laws

Asked over 3 years ago - Laredo, TX

We gave 2,000 in earnest money to a real estate agent. We didn't get financing and now we want our money back. We told her on serveral occassion to just cancel the contract and she insisted that we keep trying to get the financing we needed and we couldn't. Now she says that that money will be lost and it takes 3 to 4 days to see if we can get it back. Is this true and what action if any can be taken against the real estate agent

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Attorney answers (2)

Marci A. Rubin

Reputation Level 7

Answered over 3 years ago. Corporate / Incorporation Lawyer in Hollywood, FL.

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Without reviewing the contract for purchase and sale, it is impossible to give you an accurate account of what your rights are. The contract will govern how long you had to cancel the contract for financing reasons, if at all. It is common for there to be a financing contingency in real estate purchase contracts. Only a real estate attorney an properly advise you of your contract rights. Real Estate agents are not qualified to provide such advice and often neglect to reccommend to their clients that they should seek legal advice. If the Agent failed to cancel the contract in a timely manner after you requested same, you may have recourse to seek action against the Agent. I would suggest you contact a local attorney in your area to discuss your options. Also, contact the state's licencing department for real estate licenses. There is usually a grievance procedure for complaints against agents.

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Mitchell Reed Sussman

Reputation Level 14

Answered over 3 years ago. Real Estate Attorney in Newport Beach, CA.

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A real estate agent owes a duty of care to his/her clients. The agent should have taken steps to cancel when it was requested. Failure to do so would subject the agent to possible discipline as well as civil liability. As to whether the money is fully refundable, this depends on the terms of the real estate contract. Typically some of the money would be drawn down to pay expenses like escrow, title and so forth. But again, you must read the contract to see what it provides for.

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