Question Details

Mei Wang, Real Estate Pro in San Francisco, CA

How to get my EMD back? What is the consequence of the seller not signing the release?

Asked by Mei Wang, San Francisco, CA Sun Feb 24, 2013

I signed a purchase contract in Daly City, CA. Because of family emergency, I didn't have sufficient fund to close the loan, that means I didn't get approved for a loan. I DIDN'T REMOVE THE LOAN CONTINGENCY in the time period specified in the contract. I signed the form "Cancellation of Contract, Release of Deposit and Joint Escrow Instructions", and my agent sent it over to the seller's agent. But that agent said the seller is not going to sign the release, and they are seeking liquidated damage. And also, that agent said the seller has right to sell even though they don't sign the release.

Please advise, how do I get my EMD back? What's the consequences for seller not signing the release?

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Answers

2
I am not a real estate attorney but here is my take on this matter and should not be construed as a legal advice.
First of all, I don't know how the verbiage on the contract is written in reference to the mortgage contingency. However, based on your statement, you did not remove the contingency on time per the contract and therefore, it is still in place?

If this is the case, then you have the right to get the EMD back as you have not breached the contract.
Also, it is my understanding that the seller can't sell the house if it is still under legal binding contract--which is your contract with the seller-- unless a release has been signed by both parties.

Consult an attorney as this is not a legal advice. Just my opinion.

Best.
0 votes Thank Flag Link Mon Feb 25, 2013
Good point Maria. This is really well explained. BTW, just in case you need to electronically send to sign any documents I found this site PDFfiller that I use which I find very useful. Here is a link to form LLC-3 that I was able to fill out and sent to sign http://goo.gl/7vZELw.
Flag Thu Feb 5, 2015
Hi Mei,

Since you didn't remove the loan contingency in writing, it is still in effect. The loan contingency is not passive - it HAS to be removed in writing on the Contingency Removal form. Have your Realtor (or their Broker) remind the listing agent (or their Broker) that the contingency is still in effect and you are therefore not in breach of contract and you should get your EMD back since you can no longer obtain funding/loan. If that doesn't work, contact a Real Estate Attorney (which you may want to do anyway).

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Sun Feb 24, 2013
Thank you, Shanna. But do you know what is the consequence if the seller doesn't sign the release? Do they have right to sell and open another escrow account at different title company?
Flag Sun Feb 24, 2013
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