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How can I resolve a real estate escrow dispute?

If you were in the process of buying a property in Florida only to encounter complications that prevent you from closing on it, you might have a real estate escrow dispute on your hands. It is important for you to understand what an escrow dispute is so you can learn how to manage any disagreements you may have regarding it.

An escrow is a form of protection for you, the seller and the realtor. The funds in the escrow account are inaccessible to everyone until the satisfaction of all terms in your escrow agreement. When disputes arise between you, the seller or the realtor that prevent the completion of the real estate transaction, your escrow agent will freeze your escrow funds until there is a resolution. Here is a brief overview of ways you can resolve a real estate escrow dispute if you are unable to negotiate a resolution.


Depending on the nature of the conflict, a mediator may be able to help you resolve your dispute. Mediators can help facilitate peaceful communication between you and the seller or affiliated party that you have the disagreement with. They must remain neutral and cannot force either party to make decisions regarding the situation.


If mediation fails, the next step towards reaching a resolution is arbitration. Depending on the terms of your escrow contract, an arbitration ruling may be binding. Unlike mediation where the mediator could not make any decisions for either party, an arbitrator can. That professional will listen to both sides of your dispute and issue a ruling that he/she believes is fair. Once you and the other person abide by the terms of the arbitration ruling, the escrow funds are no longer frozen.


If the terms in the escrow agreement mandate that arbitration rulings are not binding and you have not managed to resolve your dispute, your escrow holder may file a lawsuit. Litigation may be the only way to solve the disagreement so that the transaction can proceed. The courts will decide the outcome of the disagreement. Lawsuits involving real estate transactions may take longer to resolve than disputes settled through mediations and arbitrations.

Many issues can cause conflicts to arise in real estate transactions. No matter what they are, you should try to resolve them quickly. But, if doing so causes you to accept unfavorable conditions or results in a conflict of interest, you should speak to an attorney about the matter to learn about your options.

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