What action should a buyer's agent take if both parties can't agree on who receives the earnest money after a real estate transaction fails?

In the context of a failed real estate transaction where there is a disagreement about who is entitled to the earnest money, the appropriate action for a buyer's agent is to send a written demand to the title company. This step is significant because the title company typically holds the earnest money in escrow until a dispute arises. By sending a written demand, the agent formally requests the release of the funds based on their understanding of the transaction and the contract terms. This is a procedural move that informs the title company about the dispute and allows them to act as a neutral party in either releasing the money to one side or seeking further clarification.

In many cases, the title company may have specific procedures to follow for resolving disputes over earnest money, which can include requiring documentation or allowing a certain period for the parties to resolve the matter before taking further action. This method is often seen as a more amicable and efficient way to handle the disagreement than litigation or arbitration, which can be more time-consuming and costly.

On the other hand, involving mediators, filing lawsuits, or requesting arbitration would typically follow if attempts to resolve the situation through the title company's established process prove ineffective. By first utilizing the title company's escrow services, the agent helps facilitate a resolution while minimizing potential legal