🟦 Real Agent Scenario
“We Sent the Termination… So on to the next house!”
📘 Scenario
A buyer decides they want out of a contract. The buyer’s agent sends an SCR 313 Notice of Termination to the listing agent and checks the box indicating termination based on Due Diligence.
The buyer assumes the contract is officially terminated and starts looking at other homes. The agent also tells the buyer their earnest money should be refunded.
The seller responds by disputing the termination, stating the Due Diligence period had already expired. The seller also notes that no termination fee was delivered with the notice.
Earnest money has already been deposited with the escrow holder, and no release has been signed.
Now everyone is frustrated, the earnest money is stuck, and fingers are pointing at the agent.
⚖️ Broker Guidance
SCR 313 is only a notice of termination, not a determination that a termination is valid. Sending the form alone does not automatically end the contract.
For a Due Diligence termination to be valid, all of the following must be true:
- The buyer must be within the Due Diligence period
- The termination fee must be delivered as required by the contract
- The notice must be properly delivered
If any of these elements are missing, the termination may be disputed.
Additionally, SCR 313 cannot release earnest money. If earnest money has been paid, a separate Release of Contract signed by both parties is required to authorize the disbursement of earnest money. Until that happens, the escrow holder must retain the funds.
Agents must never promise the return of earnest money or assume a termination automatically triggers a release.
📝 Action Steps
What the agent should have done:
1. Verified the buyer was still within the Due Diligence period
2. Confirmed the termination fee amount & ensured it was delivered
3. Explained that SCR 313 does not release earnest money
4. Submit a Release of Contract if earnest money had been deposited
5. Immediately involved the broker when termination timing was questionable
What the agent should not have done:
Assumed sending SCR 313 automatically ended the contract
Checked a termination reason without confirming contractual authority
Promised the buyer a return of earnest money
Treated termination and release as the same thing
If the issue has already occurred:
Notify the broker immediately
Stop making representations about earnest money entitlement
Advise the buyer to consult legal counsel
💡 Broker Tip
Termination and release of earnest money are two separate steps.
Missing one can freeze funds, trigger disputes, and expose the agent and brokerage to liability.
