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Jackie, Real Estate Pro in Los Angeles, CA

What do i do if a seller is refusing to close escrow because he said he didn't know he was agreeing to pay 3%closing cost.?

Asked by Jackie, Los Angeles, CA Thu Sep 10, 2009

Escrow, contract everything is signed and ready to fund the loan Monday, but now the seller is saying he won't pay for any closing cost. He is claiming his agent did not explain to him. He tried to back ou of the deal once before. What do i do, my broker is not much help! Help me! The seller's agent wants my buyer to pay closing cost now. My buyer does not have money.

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If the 3% contribution was in the contract then the seller has to pay it. I'm assuming that the seller signed the contract. He signed it. If he has a problem with understanding it, then he can take that up with his agent, and see if he has a cause of action against him/her (very doubtful), but regardless, he agreed to it in writing and his remedies to get out of contract at this point do not exist.

You have a lawsuit on your hands, very clear cut, and it will not be only for specific performance, but the seller can, and will be penalized for non-performance. Did the parties initial arbitration and mediation clauses? Probably in California. I would posture, extremely aggressively at this point and demand specific performance in writing. Initiate arbitration. Let the seller know the consequences of failure to perform. There could be additional costs to the buyer, loan locks expiring, amongst other financial concerns. The seller can be held liable to make the buyer whole, and may be subject to additional penalties for failure to perform.

Perhaps when the picture is painted more clearly - the substantial ramifications in addition to cost of the 3% to the seller, he will feel more cooperative.

Best of luck!

Jeri Creson, Broker
TotalAccess Realty Advisors
jericreson@yahoo.com
(818) 448-1298
0 votes Thank Flag Link Wed Sep 16, 2009
Definitely contact a real estate attorney. In our office we are able to contact attorneys we have on retainer to ask questions.
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Sat Sep 12, 2009
Have your client call their attorney immediately!
0 votes Thank Flag Link Fri Sep 11, 2009
If the 3% is in the contract tell the listing agent to do their job! Have them inform the seller that they are in breech of contract and get the show on the road. The contract rules in a transaction and ignorance is not a viable excuse. The seller signed the contract and agreed to the terms. It was ignorance that kept them from actually reading it.

If the buyer and seller agreed to arbitration in the contract one party or the other will have to initiate the proceedings and pay the hefty filing fee which may be more than the 3% in question depending on the purchase price.

If the escrow officer is any good you could have them explain this to the seller.

These kind of problems are very tiresome. I'm sorry you are going through this.
0 votes Thank Flag Link Fri Sep 11, 2009
All of the answers raise good points, but I want to stress again that you shouldn't be advising your client on legal issues. The dispute is between buyer and seller, and, as Bob said, the contract spells out the means to resolve disputes. The only thing you can do is to advise your buyer to consult an attorney.
As I said before, get your facts straight, and check the contract. If the parties cannot reach a resolution, then it's time for an attorney to counsel the parties.
Debbie Bremner
The Bremner Group at Coldwell Banker
0 votes Thank Flag Link Thu Sep 10, 2009
Before running out to an attorney, most contracts have a dispute resolution process. Start the process now! The contract defines the rights of buyer and seller and if the seller breached the contract he is liable. You won't know this until you follow the contract to the letter. This process should be handled through the broker's in house counsel. If your broker won't help, then the buyer needs to engage his own attorney.
Web Reference: http://bob2sell.com
0 votes Thank Flag Link Thu Sep 10, 2009
Hi Jackie,

As a realtor you should call the Realtor Hotline to talk to an attorney, a law sue can arise.

Good Luck
0 votes Thank Flag Link Thu Sep 10, 2009
As agents, we cannot give legal advice, and especially on a transaction of which we are not informed. Your best bet is to review your contract with your broker or manager, and find out if the client is contractually obligated to pay closing costs. In addition, check with escrow to see if he was given a Seller's Estimated Closing Statement, or net sheet, at any time during the transaction. Make sure your client has complied with all of his duties under the contract. Then meet with all the parties to strike a resolution. If you can't, then it's time to bring in your company's legal department to evaluate the situation.

Debbie Bremner
The Bremner Group at Coldwell Banker
Licensed Realtor for 33 years
310-571-1364
0 votes Thank Flag Link Thu Sep 10, 2009
Is it in the contract that the seller is paying the closing costs?

If it is in the contract and your Broker is not helping you, go to CAR legal and get their advice.
0 votes Thank Flag Link Thu Sep 10, 2009
Is it in writing that the seller agreed to pay for closing costs? If so, he would be in breach of the contract and could be sued for damages. Good Luck.
0 votes Thank Flag Link Thu Sep 10, 2009
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