Ken, Home Buyer in San Francisco, CA

Title company won't release my deposit for a short sale gone bad. How can I get my money back?

Asked by Ken, San Francisco, CA Wed May 19, 2010

I was scheduled to close on a short sale last month but the seller did not sign closing docs and has refused to communicate with his agent. The title company has sent a cancellation form to me (buyer) and seller to have us both sign in order to release the money. However, given that the seller won't even communicate with his own agent, what recourse do I have? Should the title company still hold my deposit and wait until the seller signs (which he won't)? Having an attorney send a letter to the seller is pretty much out of the question since they are leaving the country within a few months.

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Eric J Soderlund’s answer
Send a letter to the seller and copy the sellers agent and broker. Or send it to the broker and request that they forward it if you do not have access to the sellers address. It may be worth having a lawyer type it up for effect. Include the verbiage from paragraph 14E (Effects of cancellation of deposit) from the CAR Residential Purchase Agreement that states the penalty for not releasing the funds. Good luck.
0 votes Thank Flag Link Thu May 20, 2010
Hello Ken,

The funds that are currently being held cannot be released until both Seller and Buyer agree in writing. The fact that the Seller is refusing all contact with his Agent makes it very difficult. Your first course of action should be to meet with your Broker & Realtor and ask for your Broker to speak with the listing Broker, maybe they can come up with a plan to reach the seller. Even if it means knocking on their door. You also have the option of speaking with a Licensed Attorney who specializes in Real Estate law. I wish you luck!

0 votes Thank Flag Link Wed May 19, 2010
You need a real estate attorney, but I'm listening to your problem. It might not be the best way of going about it, but you might want to try and contract the seller direct. Maybe go with a friend or your agent and ask them not to take it out on you. Tell them you can understand their situation, but they should also respect your position too.

If that doesn't work, you need to get your agent and their broker involved and see what other options you may have, or get a court order.

0 votes Thank Flag Link Wed May 19, 2010
Consult with an attorney who specializes in real estate and have all documentation reviewed--the fact that the seller is leaving the country in a few months is really irrelavent, act now.
0 votes Thank Flag Link Wed May 19, 2010
Hi Ken:

Start with getting the name of the asset manager's at the Seller's bank.
They are going to get the property anyway and have to deal with it.

So your agent needs to get in touch with Seller's agent and work with the
Asset folks. Also, the Sellers agent needs to communicate with the
Title co. that the funds need to be released to you in writing.

Depending on the Real Estate company you used, they must have a legal Department
so your Agent should already be in touch.

This happens quite often, so it should all work out.

Best Regards
Web Reference:
0 votes Thank Flag Link Wed May 19, 2010
you need to talk to an attorney. Did bank approve sale? For future info, there are ways to structure an offer so that you dont put your deposit in escrow until that point. How big is deposit? Attorney may recomend small claims court and then you can get a judgement to have title release funds. Is seller still living at house? You may want to stop by and see if you can catch them in person to sign the release. Sorry things didn't work out better for you.

0 votes Thank Flag Link Wed May 19, 2010
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