Home Selling in Sacramento>Question Details

Beth Ladd, Both Buyer and Seller in 95819

what is a seller demand to close escrow?

Asked by Beth Ladd, 95819 Mon May 10, 2010

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10
I think Jim pretty much got it right to the point. It's a demand by one party or the other to stop messing around and close already! In many cases, at least right now, we are seeing that it is taking longer to get a loan in place than was expected, which makes the transaction go beyond the contracted escrow period. The seller will issue the demand, which will then give him the right to cancel the transaction if the terms are not met.

In my experience, it is mostly a technique used to let the buyer know that he has to step up the pressure on the bank to close this deal, or he may lose his future home.

"Let's either get it closed, or move on."

scott@scott-schroeder.com
1 vote Thank Flag Link Tue May 11, 2010
Yes just as everyone else has stated this is basically a way to get another party to perform.

Many escrows are delayed nowadays because of new lending violations, but technically this demand can finalize a decision by either party. Make sure when you submit an offer there is sufficient time to go through the loan process as well as do all of your inspections, otherwise you may receive one!
0 votes Thank Flag Link Mon May 17, 2010
Beth
What does your Realtor say?

The "Demand to Close Escrow" is a specific CAR form in which if the buyer does not close escrow by a certain date, the seller MAY cancel...and at that point usually keep the buyer's deposit.

Questions like this are best answered by your Realtor....not us.
0 votes Thank Flag Link Tue May 11, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Grandpa used to say "Stop fuhdoodling, fish or cut bait!"

Grandma used to ask us to stop standing in front of the open refrigerator door, while we were lost in thought:
"You're lettin' all the cold air out!"
0 votes Thank Flag Link Tue May 11, 2010
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
They have all answered this well. A Seller demand, normally referred to as 'Notice of buyer to perform' is a written notification to execute the contract as it is agreed. This notice sets a timeframe under which the buyer is to perform (as they hadn't met the already agreed upon dates in the contract) At the end of 48 hours after receiving this notice, the seller has the right to cancel the contract and go to another buyer. While they can have the right to damages,...good luck proving a financial damage in a court. Rather, they may keep the earnest money deposit, but they were entitled to that anyway, if you'd released contingencies after your 17 days of due diligence ( or whatever timeframe was defined in your contract, 17 days is the default number of days).

Most often, it's a method to get someone to get serious and abide by the terms of the contract. The seller has the RIGHT to cancel but may or may not execute that right. If you are buying a bank owned home, they could go with a back up offer, but that would mean an additional 17 days of contingency etc. (Other sellers in this market may not have a buyer in back up position ready but could....)

Best bet? Get moving and get that escrow closed now.
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Tue May 11, 2010
Beth...

It's a form that we use to get one party to move forward. The form can be set up for either the Buyer to demand the Seller close the deal or the other way around... not sure which is the case in your circumstance...

Anyway talk to your agent regarding this form.

I hope this helps....

Make it a great day...
0 votes Thank Flag Link Mon May 10, 2010
A demand to close escrow usually is produced after numerous delays and one of the parties wants the escrow to close now! or move on. Talk with your Realtor and see what the issue is and what you can do about it to get escrow closed.
0 votes Thank Flag Link Mon May 10, 2010
Hi Beth: I think you may be referring a Demand for Seller to close escrow. It is issued by the buyer and given to the seller by the buyer's agent. It demands that the seller proceed to close escrow (by signing and placing the grant deed with escrow and anything else the seller needs to do per the purchase contract to close escrow such as negotiated repairs, etc.) and allowing escrow to close. If the seller does not perform by the specified time, the buyer can, among other things, sue for specific performance in a court of law (or seek mediation and binding arbitration) if both parties agreed to do so in the purchase agreement.

Whether you are the seller or the buyer, you need to get legal advice from an attorney so that you can make the most informed decision in your circumstance.

Erin Phillips
Keller Williams Realty
Web Reference: http://SoldByErin.net
0 votes Thank Flag Link Mon May 10, 2010
Generally, when a buyer is late (usually very late) closing escrow or doesn't seem to be showing signs of being able to close anytime soon, a seller demand to close escrow can be issued. Under the default terms of the California Association of Realtors form demand to close escrow, the buyer has 3 days to close escrow (the form expressly assumes that the 3 days puts buyer outside of the close of escrow date set in the contract).

If the buyer doesn't close escrow after receiving a demand to close escrow, the seller can cancel the agreement, sue the buyer for damages (usually, the deposit up to 3% of the purchase price and/or any depreciation of the property during the time the home was off the market), or sue the buyer for specific performance (which means that the seller can ask the court to force the buyer to purchase the property).
0 votes Thank Flag Link Mon May 10, 2010
It means if you don't close within the time specified, the seller may a) cancel the escrow unilaterally and b) possibly be entitled to your earnest money deposit on top of it.
0 votes Thank Flag Link Mon May 10, 2010
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