Only thing that you will not get back is the money you spent on an appraisal, if you ordered one that is.
You did not mention the amount of deposit being held. You should also be aware that the CA CAR Residential Purchase Agreement has a "mitigation of legal risk" protection via Para 26C1. While Para 26 (Dispute Resolution) speaks to the arbitration and mediation of disputes, Para 26C(1) allows you to bypass Arbitration/Mediation if your damages are within Small Claims Court jurisdiction, $5K or $7.5K depending on whether you are suing a corporation or individual.
If you want to read up on Arbitration/Mediation I would suggest you review Kenny Tanâ€™s blog post on the subject as itâ€™s somewhat rare to have a lawyerâ€™s perspective here on Trulia. The direct link is: http://www.kennytanlawblog.com/tp-100724063949/post-10122114
As long as you did not sign the Contingencies Removal form, you can still receive your EMD back even if it's the 28th day. Since it's a mutual agreement, and it's stated so on the cancellation contract, you have nothing to worry about. I agree at some of the answers below tho, some escrow companies might charge a cancellation fee (which I find it ridiculous to do so) and/or if they have paid for some expenses on behalf of you already.
Feel free to contact me directly if you have any further questions.
Helen Chong, GRI, ABRÂ®, e-PROÂ®, SFR, CDPE
Just because you claim that the seller is willing to "cancel per mutual agreement" that does not guarantee that they also agree to return your deposit. They can agree to one without the other. By contract they should agree to this, but that doesn't mean that they will. Although rare, I have seen stubborn sellers that want compensation (even with short sales). So did they already agree in writing to cancel and return your deposit?
And Shel-lee is correct. Escrow has performed a service on your behalf and they can charge you a fee. Many do not, but they can and some do.
Are you represented by a Realtor? If you aren't getting the information that you need, then speak to their Broker.
Escrow Cancellation Fee-
The State of CA's Department of Insurance Bulletin No. NS-35E (dates back to 1965-66) allows the Escrow company to charge a fee. However, in my discussions with the CAR lawyers, you can fill out the contract cancellation in a way that prevents this (ask your Realtor to call the CAR lawyers for how this is done!).
Aside from the cancellation fee possibly putting a portion of your deposit at risk you also have "good faith" considerations. One of the primary changes in the 4/10 version of the CAR Residential Purchase Agreement was the specifically-stated incorporation of acting in â€œgood faithâ€. Definition: http://research.lawyers.com/glossary/good-faith.html If the Seller believes you have not acted in good faith they can certainly make a claim for damages against you. Again, definitively stating an opinion on whether you have legal exposure regarding â€œgood faithâ€ in your specific case is up to a lawyer at this point. While â€œgood faithâ€ is assumed throughout the contract, the following sections specifically refer to â€œgood faithâ€ (capitalization added by poster):
3H. Loan Terms; (2) Loan Contingency: Buyer shall act diligently and in GOOD FAITH to obtain the designated loan(s). Obtaining the loan(s) specified above is a contingency of this Agreement unless otherwise agreed in writing. Buyer's contractual obligations to obtain and provide deposit, balance of down payment and closing costs are not contingencies of this Agreement.
14. Time Periods; Removal of Contingencies; Cancellation Rights: The following time periods may only be extended, altered, modified or changed by mutual written agreement. Any removal of contingencies or cancellation under this paragraph by either Buyer or Seller must be exercised in GOOD FAITH and in writing (C.A.R. Form CR or CC).
14F. Effect Of Cancellation On Deposits: If Buyer or Seller gives written notice of cancellation â€¦.A Buyer or Seller may be subject to a civil penalty of up to $1,000 for refusal to sign such instructions if no GOOD FAITH dispute exists as to who is entitled to the deposited funds (Civil Code Â§1057.3).
Given you mention the cancellation is by "mutual agreement", it sounds like the cancellation should go smoothly; however, again, not all of the details regarding the cancellation are known by the responders to your question.
The answers you received below could be only partially correct. Many escrow companies are releasing earnest money deposits LESS a cancellation fee (ostensibly for services rendered by the escrow company) and any costs incurred during the open escrow (ordering of HOA documents, Natural Hazard Disclosure Reports, etc). If you read the escrow instructions that you signed, you will see that they have the right to do this.
You may need to get both your agent and the sellerâ€™s agent involved if the escrow company issues cancellation instructions that include a hold back for this cancellation fee. Most listing agents have a good working relationship with their escrow company and can get the cancellation fee waived. Also, any documents ordered for your escrow, will need to be returned to the escrow company for use with a future buyer. Because they will be able to recoup the costs from the new buyer, they should not charge you for these items. Have your agent proactively insure that escrow is not charging you these fees or you might get surprised by a $400-800 withholding from your funds when escrow issues the refund check.
Sorry to hear that this purchase did not work out for you. Good luck in your search for a replacement property and Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
Yes, you are correct - as long as your contingencies were not removed in writing, they will still be in effect, even if you are on the 18th day of a 17-day contingency period. California does not allow "passive removal" of contingencies, meaning they must be removed in writing. My colleagues Denny & Pam below are correct.
Good luck with your situation & hope you get your deposit back quickly.
Coldwell Banker Residential Brokerage