Real Estate Investing Tips | Escrow Deposits and Disputes [E-102]

Real Estate Investing Tips | Escrow Deposits and Disputes [E-102]


– Are you trying to get
your money back and can’t? On this episode of Title Tuesdays. (rhythmic drums and claps) Hey, everybody. Welcome back to another
episode of Title Tuesdays. My name’s Kevin Tacher,
the founder and CEO here at Independence Title, also
known as your title king. Today’s topic we’re talking
about all of you out there that have tried to get your money back from a title company and you can’t. And there are so many
reasons that unfortunately we are not able to release clients’ money because you have to remember. Let’s get back to basics. As a title company, we are
an independent third party. I am not a real estate attorney, I cannot make the
determination as to whether you followed through on your contract or your buyer followed
through on the contract or, worse case, they
did not follow through and you’re looking to put
a claim on their deposit. You are more than entitled
to put a claim on a deposit, and if you’re a buyer,
you are more than entitled to get your money back,
but all parties must agree. And we have this argument
all of the time with clients. We have this argument all of the time with real estate attorneys, that say, well they didn’t comply with the contract and they forfeited their deposit. And you have to remember,
forfeiting a deposit is not automatic unless there
are specific instructions to the title agent in the contract that if you do not comply with A, your money will be automatically
released to a certain party and that’s the language a lot of investors use in the contract. But you have to remember,
as a title company, we would love nothing more than
to give the person the money that is entitled to receive it, but our hands are tied with our license. We have a license to hold
escrow, and we are an unbiased third party to the transaction, which means we do not represent client A and we do not represent client B. We represent the transaction. So if you have a valid dispute,
what options do you have? Well the first one is to
negotiate a release of escrow. If you can call the party that feels they have a claim to your
money and you can convince them to do a release of escrow, maybe settle. Maybe if there’s a 5000 dollar deposit, you give them a thousand dollars
and you keep 4000 dollars. That is the best case scenario, that you can reduce your exposure, you can reduce the amount
that’s gonna be due, and you negotiate a settlement of escrow. You get that in writing, you send it over to the title company, and
we’ll be more than happy to follow those written instructions. The second case is you hire an attorney. Now we all know the attorneys
are going to charge you up front to handle that
and write a letter. Once the letter goes
out from the attorneys, sometimes then the settlement will happen. What if you cannot get a settlement? Your third and final option
is not sending it to FREC. We are not governed by
FREC as a title company. That is for real estate brokers that have an escrow account that are holding money. They can do what’s
called an escrow dispute with the department of real estate and the Florida Real Estate Commission. And they will have a hearing to determine who was entitled to that money. With a title company,
we are not that lucky. The last option is we
have to submit the money to the court registry,
and you would have to either go to small claims court, if it’s below the threshold
of small claims court, or to regular court
and sue the other party to receive your money back. And unfortunately, as
painful as that sounds, I wish I had a better answer for you. So I hope this episode
helped you to understand escrow deposits and how they get released. Proper planning today are going
to prevent problems later. We’ve spoke about in many, many videos where we talk about following
your contract deadline. Make sure if you are going
to cancel the contract, you cancel within your contingencies, whether it’s your inspection contingency, your loan contingency. Make sure you cancel that
contract in well enough time in writing to all parties on both sides within your time frame
in order to be eligible to receive your money back. We just had one where
we had to call a seller who decided she did not
want to release the escrow. I had to get on the
phone and explain to her that we are not FREC, cause she used to be a real estate agent, and
she said well I’m gonna let FREC deal with it, and
I had to educate her on this exact process, that
FREC does not determine that. I was able to pull a copy of
the buyer’s loan application from the lender, pull a
copy of their loan denial, prove to her that it was within
the loan approval period. She had an argument with
the real estate agent that was representing the buyer. She felt he was doing something wrong, but I explained to her
that this is not his money. This is the money of the buyer, the buyer that was denied
financing, for whatever reason within their rights in the contract. So she was very satisfied
that I called her. I explained that to her, and she came in and signed the release giving
the money back to the buyer and everyone was happy. So that’s what it’s about here. We need to make sure
you properly plan today to prevent those problems later, to make sure that you are
following your contingencies in the contract is the
best advice I can give you, whether you’re a real estate
agent or you’re a consumer. If you’re a consumer, please do not rely on your real estate agent. Make sure you understand your
contingencies in the contract. Although they will educate you and they are going to let you know to follow these timelines
within the contract, do not rely on that. Make sure you’re protecting your money. So thanks for watching Title Tuesdays. Don’t forget to subscribe below. You can also text in
to be one of our VIPs. VIP access gets early
release of our videos, before we even release them to the public, so it’s very important. Pull out your phones,
pause the video, and text the world title, T-I-T-L-E to 3-1-9-9-6. And you are going to get
access to our VIP video list. This is going to get our
videos landed to your cellphone every Monday, as opposed to Tuesday, and you are going to get
pre-access to many other items that we send out before
the public even sees it. So thanks for watching this
episode of Title Tuesdays. My name’s Kevin Tacher,
the founder and CEO here, signing off, and I look
forward to seeing you at the closing table. (ambient sounds)

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