Home Buying in Laguna Niguel>Question Details

Kellyy009, Home Buyer in New York, NY

Escrow kept $650 for HOA/cert fees. Will I be able to get this back?

Asked by Kellyy009, New York, NY Thu Aug 15, 2013

I canceled a home buying purchase within the contingency window and when I finally received my earnest deposit back. They deducted the HOA fee(s). My real estate person said I would get my full deposit back, yet here we are minus the $650. Now what?

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Nellie Nungaray’s answer
Hello Kelly009, It normally states in the escrow instructions that all parties authorize escrow to use the buyer’s funds on deposit in the event the HOA management company requires an upfront fee to order HOA documents. It also states that this fee is non-refundable in the event the escrow cancels. And escrow holder has no responsibility to collect these amounts from the seller to reimburse the buyer.

The buyer MAY recoup the fees IF the seller deposits funds into escrow to reimburse the buyer. If the seller realizes they are responsible for payment and they are able to use the documents for the subsequent escrow you may get it back.

Hope this helps!

Nellie
0 votes Thank Flag Link Mon Aug 19, 2013
Typically, you will sign escrow instructions as soon as Escrow is opened. A few years ago, especially with Short Sale transactions, escrow companies have built into their template that the BUYER's deposit will be used to pay advance fees such as HOA Docs. However, if you never signed docs allowing escrow to advance YOUR funds and it was agreed in your Purchase Agreement the Seller would pay for these items, they should not have deducted it from your deposit.
That said, assuming you did sign escrow docs allowing for advance of your funds, when that property is sold again to a different Buyer, you should receive your $650 from escrow when they deduct it from the new Buyer. I would send a letter to escrow notifying them that you expect your funds as son as possible. Just a last word.... if that property never sells, or becomes a foreclosure, your money is GONE!
A lesson to everyone - remove any language from the escrow instructions that allows Buyer's funds to be used / advanced for Seller costs.
Best of luck,
Thom Colby
Broker / Owner
1 vote Thank Flag Link Fri Aug 16, 2013
Your real estate agent probably misinformed you. Not seeing the purchase contract, or escrow instructions, it is probably spelled out for you to have paid the HOA fees - possibly saving said fees for the next person to go into escrow on the property.

Your agent SHOULD have told you of the possibility for such fees to be dinged against your deposit. Or, he or she could have instructed escrow to not make such expenditures until you were ready to remove all the contingencies. Did you pay for a home inspection? Same principle applies.

Perhaps your agent will reimburse you if you end up buying a different property from them.
1 vote Thank Flag Link Fri Aug 16, 2013
Not sure where to respond back, but thank you for your answer.
No, our agent never informed us of anything and he kept saying we would get the full amount back.
We never signed any of the escrow paperwork nor had the home appraised.
Any thoughts/suggestions?
Flag Fri Aug 16, 2013
You should talk with the agents broker for help or a resl estate attorney is my best advice
I've done this before. You need to put into the cancellation to get your full deposit back and have the seller pay that amoubt to escrow so you get the full deposit back . Or. When there is a new buyer to get them to sign an addendum that escrow can reimburse you for the HOA fees
The first one is better
0 votes Thank Flag Link Tue Feb 11, 2014
A few months ago my husband and I sold our home in Colorado and it was a bit difficult getting the HOA documents needed for our buyer. A family friend referred us to http://www.associationonline.com. They were a huge help in making sure we had all the right documents and the information met the state disclosure requirements. I was able to get the whole package together easily by the contract deadline. I don’t think the process could get much easier than the software and service provided by Association Online. You should visit their website or call (970)-226-1324. They’re a great help for homeowners nationwide.
0 votes Thank Flag Link Tue Feb 11, 2014
Your agent is incorrect. The funds in the escrow are the only funds that pay for expenses. The escrow has to order the HOA documents and certification in order for you to remove your contingencies in the contingency period time frame. It's unfortunate, but this happens all the time.
0 votes Thank Flag Link Sat Jan 4, 2014
Hi Kelly

A few questions before I can give a good answer without speculating
What city are you buying in?
Next is this a standard sale or short sale? If it is then you can stay on top of the property with your agent to see when it sells and goes into escrow and have the new buyer sign a document and seller that they agree to release the $650. To give back to Kelly ----- from previous escrow for items of escrow fee and HOA fee.
I have done this and it works since they have mont in escrow to work with
The seller could agree to put money In Escrow.
The only money escrow would ever have is the buyers deposit
The agents below hit on some of the things you can do as well

Talk to you Soon

Ingrid Ski Realtor
949-874-0432
OCAreaHomes@gmail.com
0 votes Thank Flag Link Fri Aug 16, 2013
Thanks. Our agent said all along we would get our entire deposit back. Then, once we got the check back minus the HOA fees, he said "well you signed the paperwork. Not a good agent at all. Any suggestions?
Flag Sat Aug 17, 2013
Thanks so much. We had signed paperwork that says buyer will pay for HOA Docs and transfer. The escrow co (Hallmark Escrow) said they sent the paperwork to us, but would not accept the paperwork back, since they couldn't guarantee it was complete now. They have said "in the event we receive any refunds, after they deduct their cancellation fee, we will refund the buyer." To me, this doesn't sound like any guarantee. Any suggestions? The house was in Laguna Niguel. Our agent promised we would receive 100% money back if we canceled in time and we did, but now we are out this money. What type of paperwork can we have the escrow co and/or seller sign, so that we may get their refund, if they one? Thanks again.
Flag Sat Aug 17, 2013
You need to review your Purchase contract and Escrow Instructions about the fees in case of cancellation, ask to your agent for help.
0 votes Thank Flag Link Fri Aug 16, 2013
Unfortunately this situation happens quite often. Before removing al your contingencies, you need to review the related HOA documents. They are ordered by escrow. Even if the purchase agreement states that the seler will pay for the HOA docs the problem arises if the buyer cancels escrow. Your escrow instructions will also say that escrow will deduct any out of pocket costs from the buyer's deposit. In other words escrow will not pay for these when they get the bill. You can try and get your money back from the seller or listing agent and give them the documents they will need to supply to the next buyer. ( They will not often want to put up money outside of escrow but it is worth a shot.) If not, either you or your agent will pay.
Sorry and good luck,
0 votes Thank Flag Link Fri Aug 16, 2013
Not sure where to respond back, but thank you for your answer.
No, our agent never informed us of anything and he kept saying we would get the full amount back.
We never signed any of the escrow paperwork nor had the home appraised.
Any thoughts/suggestions?
0 votes Thank Flag Link Fri Aug 16, 2013
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