Home Buying in Orange County>Question Details

Trueman, Both Buyer and Seller in Burbank, CA

I am in escrow but the bank is saying that I have to close before the date of what my contract specifies. (30 days.) I am a cash buyer and have

Asked by Trueman, Burbank, CA Mon Jun 28, 2010

posted the earnest money already, but escrow has not had it for more than 17 days. However, I'm not sure what the exact day I started escrow is. Will I be able get my deposit back? I was supposed to be buying this as a short sale. The bank says that if I don't close in the next few days, they will cancel the sale. If THEY cancel the sale, can I get my deposit back? Or is it better for me to cancel escrow and try to fight for my deposit? I read on About dot com that it could be tied up for 2 years and then eventually get released to the state. It's a 10k deposit, so I'd prefer not to lose it.

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22
Trueman
I was pretty certain that the outcome was going to be positive. Glad it worked out for you.
Web Reference: http://www.markandtim.com
0 votes Thank Flag Link Wed Jul 7, 2010
Trueman -

What a great outcome! Good for you!

Let us know if we can help you in any way.

Best,

Thom Colby
Broker / Owner
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We never double-end a transaction in our brokerage.
888-391-5245 Direct Cell
0 votes Thank Flag Link Wed Jul 7, 2010
Just to give you an update, the escrow money was released to me. The inspection revealed water damage that would have been costly to repair. Now it makes sense to me why the seller's agent was trying to rush the sale. I'm glad I followed my instincts.
A big thank you to everyone who answered my question and gave valuable insight!
0 votes Thank Flag Link Wed Jul 7, 2010
Trueman
There has been a lot of good comments. If you are asking because you got fearful continue on. If there are a few days difference ask for an extention. If you are in the 17 day period you could be safe. Usually, unless you did something unusual at this stage most would not keep deposits.
Web Reference: http://www.markandtim.com
0 votes Thank Flag Link Wed Jul 7, 2010
Hi.
I am troubled by your answer. When you signed a contract with your agent, he or she should have explained to you,paragraph by paragraph, it clearly states that you have a specific time period to remove all contingencie. you signed and initialed the contract, and each page should have been explained to you, that is one of the reasons, for hiring an agent. Your agent should have informed you on day 15, this is very disturbing, you may have recourse, but you need proof of misinformation.
0 votes Thank Flag Link Wed Jun 30, 2010
Trueman -

If you are going to cancel you need to have your agent formulate the "Cancellation of Contract, Release of Deposit and Joint Escrow Instructions" it is a single form to be signed by Buyer and Seller. I suggest you do that ASAP if you want to cancel and make sure the appropriate reason is checked in the Cancellation Section.

Unfortunately, there have been times when a Seller doesn't want to sign for whatever reason. It becomes a drawn out process but eventually the law prevails. Best find out right away so you know what you're dealing with.

Thom
0 votes Thank Flag Link Mon Jun 28, 2010
Thom,
I was wondering about that. Is it legal for them not to release the good faith money and not give a "good" reason? It seems that there are backup offers on this property, so it's not like it's going to sit for very long. Also, does anyone know of any case where the court ordered escrow to return the funds?
0 votes Thank Flag Link Mon Jun 28, 2010
well, good thing you spoke to the escrow( 3rd part/ I n order to get your deposit back seller has to release it in writing if you have any further assistant in future, please feel free to contact us
good kuck
khawar yousaf

http://www.bcrecentury21.com
0 votes Thank Flag Link Mon Jun 28, 2010
Trueman -

I'm happy you spoke with Escrow - remember they are the real "Neutral 3rd Party" One last thing, for you to get your deposit back, the seller has to release it in writing.

If you feel troubled about this transaction, you should certainly do what you feel is best for YOU.

I wish you the very best, and if you need any assistance in the future with other transactions, I can certainly assist you.

Best regards,

Thom Colby
Broker / Owner
Thom Colby Properties
Orange County CA
888-391-5245 Direct Cell
Web Reference: http://www.thomcolby.com
0 votes Thank Flag Link Mon Jun 28, 2010
Update -I wanted to inform the board in case anyone else ever has these same questions. So I spoke to escrow who were way helpful and nice. Escrow actually told me that they can make sure that I am allowed 30 days to close and that I'm not closing over a long weekend where the owners can't even move out even though the property is recorded on my name. The bank has these policies where a cash buyer has 3 days to post, but the law is not stated that way. My understanding is that they can back out of the deal, but if the do so, they can't keep my deposit. She said I can still back out of the property as well and get my deposit back.
0 votes Thank Flag Link Mon Jun 28, 2010
Reuben,
As stated below, I'm getting cold feet for various reasons, including feeling abandoned by my real estate agent, who I thought was supposed to act in my behalf. I actually found this forum when I was on Google trying to see if I'm allowed to switch agents after opening escrow. But then I called my agent and asked a bunch of questions and at then end of it all said, "If you have questions, call escrow." I called escrow who didn't answer, so I wrote to this forum to try to get some answers. Anyhow, I never signed off on contingencies and also my inspection is scheduled for tomorrow. However, until today I wasn't aware of the 17 day inspection period, and if I am indeed past it, an inspection may be irrelevant at this point.

Thom,
I believe I have all documents right now, it's just a matter of thumbing though everything to make sure I know what my rights are. And like everyone is saying, I understand the clock is ticking. Also, I did not give her power of attorney, however I'm sure it's in an email somewhere where I told her it was fine to sign some of it. And talking to her broker is not really going to help. It's her husband.
0 votes Thank Flag Link Mon Jun 28, 2010
Hi Trueman,
Broker Colby asks a great question. Are you serious about closing this deal? If you are and have completed your buyer's investigation(s) then moving up your closing date should only be of benefit to you, unless you're having doubts about the purchase.

The escrow opening date has nothing to do with your scheduled and contractual date of close. Often times, agent's don't open escrow until they know the deal is going tomove forward because fees are involved after an escrow opens.

Return of Earnest Funds: Depend on how your offer was written and what the agreed terms are. I would consult with your agent and if you don't have one then, you may need to seek profeesional legal advice to further understand your contract and your rights under the term and provisions established in your agreement.

Try not to let a breakdown in communication ruin your deal. Often times, you can remedy the situation, if you or your agent gets on the phone and gets a little more involved ( while keeping your cool and resolve to being a solution maker rather than reactionary and positional)


Reuben Pacheco
Prudential California Realty
Pacific Design Center- West Hollywood
8687 Melrose Avenue, Suite G271
West Hollywood, CA 90069
323 466 5358 Offc.
213 804 4245 Mobile
http://www.ReubenPacheco.com
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GOOGLE ME ( Reuben Pacheco).
0 votes Thank Flag Link Mon Jun 28, 2010
Trueman -

One more thing. Ask you agent for a copy of all documents relating to this transaction. The Agent MUST give you copies.

Thom Colby
0 votes Thank Flag Link Mon Jun 28, 2010
To Eric;

This is supposedly a Short Sale - NOT an REO - if it is a short sale, there will be NO Bank Addendum.

Thom Colby
0 votes Thank Flag Link Mon Jun 28, 2010
True -

Four more things that are interesting -
1) Did you sign a Short Sale Addendum? That will state when your "Time Periods" start. It depends if a box was checked or not..
2) Escrow started whenever the contract was deposited into escrow and an escrow number was assigned. - Call Escrow and they can tell you.
3) The agent signed everything for you - Did you give her a Power of Attorney ? If not, I doubt it's valid - check with your attorney.
4) The seller (agent) must provide a copy of the Lender Approvals to you. Look on those approvals and see what date the bank stated it must close by........ Typically banks are giving 15 days on Cash Offers and 40 days on financed offers.

Do you still have any of your contingencies? Talk to your agent and if not satisfied, talk to their Broker.

You MUST act fast, the clock is ticking away.

Best of luck,

Thom Colby
Web Reference: http://www.thomcolby.com
0 votes Thank Flag Link Mon Jun 28, 2010
Hi Truman;
Usually when you enter into contract on an REO, the bank will send an addendum that spells out what they want from you, what title company to use, penalties for late closing, and any other thing their lawyers want to put in the contract, or that they want to over ride the normal California Purchase agreement. So, what you are looking for is an addendum from the bank. It will look different from the normal CAR contract forms, and it is usually filled with legalize that is hard to decipher.
Why is your agent not helping you more?
0 votes Thank Flag Link Mon Jun 28, 2010
Eric,
I'm not sure if there is an addendum or not, since she signed my name on all the documents since I was out of town. Can you tell me what document that would be on so I can look? I know that sounds bad, but we've done tons of deals before and she said all the documents were the same ones that I've seen on everything else. However, now I'm wondering if she signed stuff that I am unaware of. This is the first deal I'm doing with her where things seem out of sorts.
Thanks,
Trueman
0 votes Thank Flag Link Mon Jun 28, 2010
one more thing: Your escrow period began when the bank issued their short sale approval letter. The day following the bank issued approval letter started your 17 day due diligence (inspection period) clock.

EmilyKnell1@yahoo.com
562-430-3053 cell
0 votes Thank Flag Link Mon Jun 28, 2010
Thom,
Thank you for your reply. To be honest, I am getting cold feet about the property. My contract is for a 30 day escrow. I believe that means I would close on the 8th. However, they said that I would have to close on the 2nd instead if the bank sent approval today. My agent is doing nothing to sort this out and has started lying to me about things. She said that the bank will give it to someone else because there are listings going for 2xs what I'm paying. Well, that may be true, but they are for the large penthouse units, not the small closet I'm buying. Also, the owners are not moved out and refuse to move out until the bank has the money. The place as it is now is a total wreck, so it makes it tough to thoroughly inspect. Also, if I close on Friday, she says they don't have to move out until the next day. The building doesn't allow move ins/outs over the weekend, and it's a 3 day weekend, so they will not move out until Tuesday. In any case, the whole thing sounds shady and so I started to get worried. Also, last week my agent asked if I could close earlier and when I asked her why, she said that the other agent really needs the money. I said that my schedule should not be dependent on her need to feed her kids and pay her rent, so then my agent came back and said "oh, it's because the bank needs you to close immediately or you will lose the property." I'd also like to add that my agent and the listing agent used to work together and are good friends.

So maybe there is nothing wrong with this transaction or the property, but something doesn't smell right, so I'm wondering if I should follow my instincts and get out. On the other hand, I'm pretty sure I can flip the property within 6 months without losing money if I end up getting it and not liking it.
0 votes Thank Flag Link Mon Jun 28, 2010
First sentence of Thom's answer says it all. You sound like you're looking for an out,,,do you want to get out or what?

If your 17 days for your due diligence period isn't up yet & you now want out, you better do it now & claim something on the inspection report is causing you not to buy. You're likely getting a better deal with this short sale then if you were to go out & offer on an REO property or equity sale,,,You need to take an hour out of your busy day & talk to your agent, see if you two can't iron out what your issues may be & see if you can continue.

If you'd like an independent opinion about what you're paying for this house & is it a good deal, let me know, I'd be happy to investigate for you.

What your purchase agreement states for a closing period (30 days or otherwise) is superseded by whatever the Banks' approval letter & terms state. SO, if they're requiring you to close earlier than 30 days, those are your NEW terms & it may cut pretty close to your 17 day due diligence period. The bank knows that as a cash buyer, if your inspections are done, and there are no issues, there's no reason for you to NOT close.

Questions, email me directly, I won't post again on this Trulia thread

EmilyKnell1@yahoo.com
562-430-3053 cell
0 votes Thank Flag Link Mon Jun 28, 2010
First, the contract is a bilateral agreement. The bank cannot simply demand you close early, unless there was an addendum from the bank saying they can do this.
It seems like a lot of these questions, like when the escrow period started, could be easily answered by your Realtor. Where is your Realtor? Are they not responding to you?
0 votes Thank Flag Link Mon Jun 28, 2010
First, Do you want to buy this house or not? If this is a Cash Transaction, and you have received approval from ALL short sale Lenders, why would you not close ASAP? Have you completed your inspections? HAve you received the HOA Docs and Seller Disclosures?

Why do you not want to close?

Escrow should be able to tell you definitively when Escrow was opened. That said, it doesn't matter in a short sale. The bank provides an approval to sell the property short. They will dictate as to when that approval is "good through".

Is your agent also the seller's agent ? (I hope not)

Help me understand - I do a lot of short sales and the Listing Agent can always request an extension - it may cost a per diem charge to you but you will likely get the extension.

Best of luck and let us know what happens,

Thom Colby
Broker / Owner
Thom Colby Properties
Orange County CA
888-391-5245 Cell
Web Reference: http://www.thomcolby.com
0 votes Thank Flag Link Mon Jun 28, 2010
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