Home Buying in Sunnyvale>Question Details

Cyril, Home Buyer in Sunnyvale, CA

I have not released contingencies, for a 494K REO home, I put a deposit of 50K, I want it back,

Asked by Cyril, Sunnyvale, CA Mon Feb 23, 2009

I have not released contingencies, I put an offer on the home and after inspection I found a few problems in home & also declining prices I decided to back out. Sale price 494K REO home, I put a deposit of 50K in escrow. No further contract was signed, no contingencies were realeased, bank owning property says they will not refund, what to do!

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I hope you have your own agent representing you and not the listing agent. REO's usually have you sign some sort of addendum provided by them in addition to the standard CAR Purchase Agreement. In the absence of the issue being outlined in the bank seller addendum, the CAR Purchase Agreement should prevail. The agent who wrote your offer for you should be resolving this issue for you and if they are not helping you, seek the advice of their broker. To find out who is their broker, you can go to http://www.dre.ca.gov/cons_home.html
This website is the consumer section of the California Department of Real Estate. You may also file a complaint there. $50k is a lot of money to have at risk, you should also consult a real estate attorney if you more time goes by without a resolution. The escrow company has the good faith deposit. They shouldn't be able to release it to anyone without an escrow instruction signed by you and the seller, therefore, the deposit might sit in escrow until the issue is resolved.
1 vote Thank Flag Link Mon Feb 23, 2009
Cyril -

I believe Andrea's answer is spot on advice. Make sure you get your agent's broker involved (assuming they are not a broker). The money should be held in escrow. You should have sent a cancellation of contract. If you are within the contingency period (particularly physical inspection time period), you should be able to have the deposit returned to you.

Move this issue up the brokerage ladder quickly and then to the DRE as Andrea has suggested. If you do not see some progress, contact a real estate attorney to help.

CJ
Web Reference: http://www.TalkToCJ.com
0 votes Thank Flag Link Mon Feb 23, 2009
Your agents Broker should step in if the agent is new and may have missed something. Finding additional problems during your inspections should be a way out for you. However if the contingencies dead line expired you have a problem and your locked in. Don't feel bad. It's probably still a great buy. Tell me the address and I will let you know for sure. I was born and raised in sunnyvale and have been working with real estate for 30 years.
David Rivas
(408) 4341-7202
0 votes Thank Flag Link Mon Feb 23, 2009
Hi Cyril,

First off, the bank does not have your deposit. The escrow company has your deposit. Secondly, you need to read your purchase agreement and bank addendums (anything additional that the selling bank had you sign outside of the purchase agreement). Look for the details of your contingency removals. Typically banks build in automatic contingency removals within a certain period of time (usually 5-10 days). That means that once the alotted time has lapsed and you have not either cancelled or filed a request for repairs in writing, then the contingency is no longer valid. If this is the case you will lose your deposit. This is why when shopping REOs it's crucial to have an informed, detail-oriented agent that will monitor and protect you from the parameters in the bank addendums.

Unfortunately, if you did not cancel within the contingency period you will likely not retain your deposit. Again, check your purchase agreement and bank addendums.

Best of luck!!
Tara

Tara Steinke
San Diego Specialist
Residential Sales and Appraisal
619-384-6014
mysandiegoagent@gmail.com
0 votes Thank Flag Link Mon Feb 23, 2009
Hi Cyril -
Does your contract have an active or passive removal of contingencies? Why did you put a $50,000 deposit in escrow? Did you and the seller sign the "Liquidated Damages" clause? What is your agent and his/her broker advising you to do?

Roland
0 votes Thank Flag Link Mon Feb 23, 2009
Cyril:

You have to read the contract VERY carefully. Banks use their own purchase agreement written with only their interests in mind. They have systematically removed buyer’s rights that are contained in a normal C.A.R. purchased agreement. The buyer’s agent you used should have known this and advised you of such.

In a normal contract, contingencies have to be removed in writing. In some REO contracts, they are removed automatically as soon as the contingency time periods lapse or expire. That may be the situation in your case.

Typically, for an REO purchase agreement, if you wish to cancel a transaction, you have to cancel the contract IN WRITING with a Release Of Contract form PRIOR to the contingency time periods expiring. Failure to do so may mean you are locked in to the transaction or, should you wish to cancel, you forfeit your deposit.

By the way, $50,000 deposit for an REO is very high – normally, they require 1% and, in some cases, a maximum of 3%. Are you talking about the deposit or down payment?

Discuss this with your buyer’s agent and if you don’t get a satisfactory resolution, talk to their broker. You may need to get a real estate attorney involved as well.
.
Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Mon Feb 23, 2009
CYril,

Talk with your agent and his/her manager. If you aren't satisfied, consult with a real estate attorney. Unfortunately you have found out that placing money into escrow is easy. However getting that money released requires mutual written agreement by both sides. I also would re-read your contract so you are aware of your obligations as well as the other parties. Sorry.
0 votes Thank Flag Link Mon Feb 23, 2009
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