Home Buying in Los Angeles>Question Details

Daan_ren, Home Buyer in Stevenson Ranch, CA

Can I back out of escrow one day before closes because it was flooded by a toilet just on that day?

Asked by Daan_ren, Stevenson Ranch, CA Wed Jun 12, 2013

I removed all contingencies and am going to close loan tomorrow. But I just got a call from realtor the house was flooded one day after seller moved out, it is a big house. Damage is pretty serious, from 2nd floor to 1st floor, all floor need to be replaced, don't know damage to wall yet.

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The house is supposed to be delivered to you at the condition you bought it in , I would ask for a delay of closing until you can get repair bids,then you talk to sellers about it .Good Luck !
0 votes Thank Flag Link Thu Jun 13, 2013
This is sticky. Have you done you Final Way Thru? If so, during you Final Walk-Thru the property was in satisfactory condition. That final walk-thru and professional home inspection conditions were what were approved and buyer processed with close of escrow. NOW, property has been damaged because of flood. I do not know what caused flood not important. On one of my rentals the 2nd floor toilet flooded and caused extensive water damage to both the 1st and 2nd floor. Damage included: floors, walls and 1st floor ceilings. Before any repairs or replacement could be made had to have commercial air blowers to dry out the moisture damages rooms. The total process drying out, repair and replacements took several weeks. The damage was in the thousands and my insurance company covered most of the damages.

The seller is responsible for repair/replacement. The property is still in the owner's name. At this point the buyer does not know extent of damage or costs. But for prospective buyer(s) I would not proceed with close until possible resolution is reached between buyer and seller. Have your Realtor contact the company's Attorney for proper escrow amendments to delay escrow until water damage is resolved between buyer(s) and seller(s).

This is an unfortunate situation, but a least this happen before close and not after property was transferred to new owners. I would not proceed with close.

Gail Mercedes Cole
EXP Realty
310.853.9933
0 votes Thank Flag Link Thu Jun 13, 2013
I don't know that you can cancel without being in breach of contract. The agents should be addressing this and coming up with a comprehensive solution. Obviously, since the flood occurred while still under ownership of the seller...they are responsible...

You might postpone the close until both agents come to an agreement on how to fix this.
0 votes Thank Flag Link Thu Jun 13, 2013
I would suggest you have this discussion with your own agent.
Good luck!
0 votes Thank Flag Link Wed Jun 12, 2013
Hello, the home damages will be covered by insurance and the home can be repaired with brand new flooring, paint and what ever extent of the damages are and will be better than before. The damages will not lower the value at all unless you replace the flooring with lesser qualify than was there. Water damages that are repaired as good or better than before.

The home is not yours yet so they can hold up funding until you clearly understand the damages repairs. Sometimes it is a blessing in disguise of these things and if there were any flaws in the flooring before it will be replaced with your choices if you arrange it. Good luck.

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0 votes Thank Flag Link Wed Jun 12, 2013
Thank you! Can I back out even seller is willing to repair it? Because big water damage will lower house value significantly.
0 votes Thank Flag Link Wed Jun 12, 2013
Your agent can have lender hold funding until problem is resolved .
0 votes Thank Flag Link Wed Jun 12, 2013
You have the right to find the property same conditions as you saw it the first time when you decided to make an offer. Seller must do repairs otherwise you can cancel and your EMD is not at risk, thank you!!!
0 votes Thank Flag Link Wed Jun 12, 2013
Well, you need to demand seller to do repairs if he refuses thank you can cancel, thank you!
0 votes Thank Flag Link Wed Jun 12, 2013
You would ask the Seller to fix and pay for repairs to fix the problem, once you remove all contingencies and signed loan docs if you cancel seller can keep your deposit, thank you!!!
0 votes Thank Flag Link Wed Jun 12, 2013
I would ask this question to the wonderful agent you hired to represent you. He knows all the details and reasons... the technicality of what you can do and cannot do is always a judgement call... based on facts -which no one here has.


Best of luck!

ron@select-realestate.com
0 votes Thank Flag Link Wed Jun 12, 2013
Can I get 3% deposit back if I back out now?
0 votes Thank Flag Link Wed Jun 12, 2013
See a lawyer ASAP. The financial implications are much too serious and complex - do not trust resolution of this issue to your agent.
0 votes Thank Flag Link Wed Jun 12, 2013
The Property is NOT yours yet. It still belongs to the Seller. They should still have insurance on the Property, your would not start until the close of Escrow. If you worked with an Agent and you used the CAR purchase agreement, look at Paragraph 9B.
You can stop Escrow from moving forward until the issue is resolved to your satisfaction.
0 votes Thank Flag Link Wed Jun 12, 2013
To properly answer this, I would need to see your Purchase Contract. It's possible you can withdraw but probably would not be recommended. At any rate, contact your attorney and make him aware of this. Go inside and take pictures and take them with you to the closing. I would expect that this will be the cause of some significant closing-day negotiations. Very likely, the seller's homeowner's insurance will take care of it. Listen to your attorney's advice on this.
0 votes Thank Flag Link Wed Jun 12, 2013
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