Home Buying in Miami>Question Details

Lance, Home Buyer in Miami Beach, FL

How can I get my escrow deposit back from a seller who will not sign the release?

Asked by Lance, Miami Beach, FL Mon Oct 27, 2008

This was a short sale and the contract expired 4 months ago, I continued to wait to see if the bank would get the appraisal done and approve the contract. I have finally decided to not continue the process and I notified the seller and the title agent who has the escrow money. The seller is now refusing to sign the release so I can receive my money back and unfortunately the title agent can't return my money without a signed release. I have referred this matter to my attorney and am waiting for him to review my contract and get back to me but in the mean time I can't find much information on this on the internet.

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Answers

11
Read your short sale addendum. The most updated mentions deposit is not even due under the bank accepts the terms being offered.
0 votes Thank Flag Link Sun Nov 9, 2008
I'm sorry Lance. This story is a great warning to Buyers about how they should be represented by a Buyer's Agent.

When the Listing Agent admitted to you that he was going to get the full commission, regardless
of whether or not you had an Agent, it should have been a warning to you. He was being honest,
but he didn't say he would represent you. His obligation is to his Sellers, NOT any Buyer. He does
need to deal fairly and honestly with you. But, he does not have to work in your best interest.

Without actually seeing your Contract, it is hard to know what has transpired. From the sounds of it,
you are not represented. You have recently contacted an Attorney and this could cost you more money
(in addition to your Earnest Money). Hopefully, your attorney finds a winning solution for you. And, hopefully,
this doesn't end up being a costly mistake on your part (by not having a Buyer's Agent represent you).

You keep referring to the fact that the Lender hasn't ordered an Appraisal nor "accepted the Contract. Please realize that the Lender doesn't have to order an Appraisal, especially if they know they aren't going to do the loan (other factors may be the cause). And, the Lender doesn't "approve" a Contract.

The only person who "approves" a Contract is the person who accepts it or counters it when they put in their Offer. A Lender only has to "approve" YOU for a loan. The Contract is needed for them to see what the Sales Price is, and what the conditions are, etc... And, to make sure that the Contract is fully executed and something they want to get involved with.

Hopefully, your Attorney will make all this clearer to you soon. In Real Estate, TIME IS OF THE ESSENCE.

Good Luck!
0 votes Thank Flag Link Mon Oct 27, 2008
And also...........
I did sign a short sale addendum which states that the approval of the lender has to be in 60 days. Either way, as of today's date the bank hasn't even completed the appraisal or accepted the contract.
0 votes Thank Flag Link Mon Oct 27, 2008
When I saw the house, the agent that showed me the house asked me if I had an agent and told me that if I didn't he would try to push our contract because he wouldn't have to share the commission with anyone. Anyway, once we put the money in escrow we barely heard from him. When we would ask him to update us on the progress he would tell us to call the title company who never answered their phone. After 4 months (the contract had already expired) I became a little weary and I was able to track her down and I changed the title company for one that my family had used. We never signed a new contract or amended the old one. I continued in good faith waiting but the bank never accepted the contract or even did the appraisal on the house. In answer to someones question about financing, I had a pre-approval but I can't get financing unless the lender gives me an executed contract, which never happened. I finally grew tired of waiting, I waited 6 months, and wanted out. According to my title agent he said this wouldn't be a problem all we need is the seller to sign a release. At first she said she would sign and then she decided not to stating that I was just stringing her along and never had any intention of buying the home.
0 votes Thank Flag Link Mon Oct 27, 2008
Lance
Were you represented by a Realtor? Or did the listing agent handle both sides?
Either way if the agent is not helpful. I would call their broker.

Have copies of everything that you signed.
0 votes Thank Flag Link Mon Oct 27, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
if there was a short sale addendum stating the sale was contingent upon the lenders approval of the short sale, you should not need the sellers signature. a letter from the lender stating they did not accept the sale is proof enough. if this isnt enough for the escrow agent, there should be a clause where they turn the deposit over to the clerk of courts, then you give the evidence to a judge or magistrate to get your money back,. good luck with getting it worked out
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Oct 27, 2008
In most short sales- the buyer can easily walk away from the transaction without penalty. The matter is out of the "sellers" control and in the hands of the "lender; [3rd Party]. Did you sign a SHORT-SALE-ADDENDUM along with the offer to purchase?

The dates for lender performance are spelled out on that addendum. From my experience, escrowed funds HAVE been released to abuyer without the release being siigned by the seller.

TIME PERIODS and APPROVAL DEADLINE is what this matter is all about.

Your attorney should have no problem recovering the deposit.

Attached is a blank copy of what the form looks like.

Mott Marvin Kornicki, Realtor®/Associate
Aventura • Bal Harbour • Sunny Isles Beach
0 votes Thank Flag Link Mon Oct 27, 2008
Not seeing the Contract, it may be that you inadvertantly defaulted already on the Contract. Do you have an Agent? Your Agent should have been communicating with you, about your Contingency Dates. If, as you stated, you have been "waiting to see if your bank would approve the Contract" ,then it very well may be that you are past the Financing Contingency. If you didn't notify the Seller before the Contingency expired (to get an Extension), you could have been past that time period and in effect "waived" your Financing Contingency. I'd hate to be the bearer of bad news, but this could mean that unless you go forward on the Contract, you are in Breach and the Seller could keep your Earnest Money. Luckily, you have an attorney looking into this for you. And, I have to admit, that I am NOT an Attorney, and I do NOT have the ability to Practice Law or Interpret your Contract for you. I'm just giving you my best educated guess at what possibly may have happened. I wish you the best and please keep us posted as to the results of this issue!!!
0 votes Thank Flag Link Mon Oct 27, 2008
Hello Lance,

In regards to your question unfortunately a title company faced with conflicting demands as described above is likely to maintain the funds in escrow until the buyer and seller resolve their dispute. My suggestion is make nice with the seller.

Call me if you need further assistance.

Regards,

Andre’ Shambley




Luxury Home Specialist
http://www.Keyes.com/Andre.Shambley
AndreShambley@keyes.com
Office: 305-931-8920 ext 245
Mobile: 305-788-6643
Fax: 305-931-9853

"Given the degree of exposure I can provide, if I can't sell your home...no one can!"

Aventura
2822 NE 187 Street
Aventura, FL 33180

Interested in buying, selling or renting a condo, townhome or house, visit me at: http://www.Keyes.com/Andre.Shambley

Ready to refinance for a better rate, visit: http://www.JShambley.ApexLending.com
0 votes Thank Flag Link Mon Oct 27, 2008
Hi Lance,
Your move to have a real estate attorney handle this was the right one, as this is a contractual issue, even though the contract expired. I would not try to make contact with the seller--have your Realtor and/or the attorney do that.
Have your Realtor prepare an addendum to the contract so you can sign it, and send it the seller, and one copy to your attorney, and keep a log of everything.
Good luck!
0 votes Thank Flag Link Mon Oct 27, 2008
Lance:

You likely signed a paper at offer time indicating that this was a short sale and required bank/3rd party agreement to become effective. Since the bank did not give you an answer, there should have been a date by which you were able to walk away from the offer (usually 45 days). Based on that the seller will have no ground to keep your money.

I am no attorney, but that is based on basic paperwork provided by the Florida Association of Realtors (Short Sale Addendum to purchase and sale contract). So your attorney should have no difficulty enforcing it.

Tony.Vega@Coldwellbanker.com
0 votes Thank Flag Link Mon Oct 27, 2008
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