Home Buying in Riverside>Question Details

Kevin Radcli…, Home Buyer in Redlands, CA

Seller refusal to sign escrow cancelation

Asked by Kevin Radcliffe, Redlands, CA Tue Dec 30, 2008

Hello, I just submitted a cancelation of escrow on a property due to the lender declining the loan due to some problems with the property. I have not yet removed my loan or appraisal contigency. I know that legally I am entitled to recover my earnest money deposit. The seller is quite defiant and is refusing to sign the cancellation of escrow. Therefore, escrow cannot return my deposit.
How long can escrow keep my deposit? What legal right do I have? I have tried with 3 lenders now and they are all refusing to do the loan. I did my best. I am done with this property and want to move on...I need to find a new home to purchase asap, but cannot move forward until I recover my deposit.
Please advise! This is so stressful!
Thank you in advance.

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Answers

3
Our recommendtion is to put it in writing that based on the present circumstances you are referring this issue to your attorney. Copy this to the seller and listing agent making them aware that future communication will be through and with the attorney. Send it signed reciept requested.

We suggest doing this a couple of weeks prior to speaking with your attorney, giving them time to see the light. If it goes well you will have your escrow funds prior contacting the attorney.

Good luck
1 vote Thank Flag Link Wed Dec 31, 2008
My suggestion would be to contact a Real Estate Attorney and ask them to draw up a letter informing the Seller that you did not remove your loan contingency and therefore he cannot keep your deposit and to avoid legal ramifications he must return you deposit within so many days. Send the letter via registered mail to the Seller, Listing Agent and Escrow. Usually that takes care of it real quick. Check with your Agent to see if she/he has an in house legal dept. that might be willing to write the letter or you may just have to go to one of your own choice. It shouldn't cost much to have this paper written for you. Good luck!!
1 vote Thank Flag Link Wed Dec 31, 2008
Technically, the seller cannot enter into escrow with another buyer until they have cancelled out the current escrow. Some may attempt to get around this by opening the new escrow with a different escrow company, so be sure to watch the status of this property to see if another offer has been accepted.

Talk with your realtor and with escrow to see if they have any suggestions for getting this seller to release your deposit. I'm assuming that you and the seller signed the arbitration clause in the purchase agreement, so that could be used as well, although it would likely cost you some fees to do so.

Good luck!
1 vote Thank Flag Link Wed Dec 31, 2008
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