DOUGLAS COUNTY, Ga. — Jazlin Pitts packed up and moved out of her townhouse the weekend before a scheduled Monday closing.
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“Everything is empty. There’s an echo in the house,” Pitts said while showing Channel 2 Consumer Investigator Justin Gray her vacant home.
The closing never happened.
Pitts said the buyer backed out on the day of closing, but she believed she would at least receive the $2,500 in earnest money that was deposited into an escrow account 21 days earlier.
“At least I’ll get my earnest money,” Pitts recalled thinking.
That never happened.
“I signed a contract. That money is contractually owed to me and it’s not in my pocket,” Pitts said.
The buyer deposited $2,650 in earnest money through an Automated Clearing House, or ACH, transfer. The funds were held in an escrow account maintained by Atlanta Communities Real Estate Brokerage for 21 days.
Both the buyer and Pitts later signed a mutual agreement terminating the sale and directing the earnest money to be paid to Pitts.
But Atlanta Communities says the money was no longer in the escrow account when the brokerage attempted to distribute it.
In an email to Pitts, the brokerage wrote, “To be clear, there is no dispute regarding the Seller’s entitlement to the earnest money.”
The brokerage added: “At this point, however, Atlanta Communities no longer has possession or control of the earnest money funds.”
Erin Glynn, a real estate attorney not involved in the transaction, said she has never encountered a situation where money was removed from an escrow account in this manner.
“It’s very concerning that a third party was able to go into an escrow account from an external source and deduct those funds,” Glynn said.
Atlanta Communities told Channel 2 Action News that the buyer disputed the ACH transaction with their bank on the same day the parties agreed the earnest money should be paid to Pitts.
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Rules published by NACHA, the organization that governs ACH transfers, state that ACH transactions can be reversed only in limited circumstances, including duplicate payments or payments sent to the wrong account.
“This should be my money. They agree. There’s no dispute. So where’s the money?” Pitts said.
After Channel 2 Action News began asking questions, Atlanta Communities sent a formal demand letter September 21st to the buyer seeking repayment of the $2,650 earnest money deposit.
The letter states that Pitts and the buyer signed a mutual termination agreement on Aug. 6 directing the earnest money to be paid to Pitts, but “there was no Earnest Money available to be returned due to your actions.”
“The reversal of the ACH deposit does not relieve you of your legal obligation to pay the Earnest Money, which rightfully belongs to the Seller in accordance with the signed Mutual Termination agreement,” the letter states.
The letter warns that the brokerage may pursue collection efforts through the courts if payment is not made.
Gray exchanged emails with the buyer, who said she did not know what happened and that the matter was out of her hands.
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