Sue Bloom, Home Buyer in Danville, CA

Can Seller Keep $10,000 earnest deposit; put back up offer in first position; without sending us a Notice to Perform- NBP?

Asked by Sue Bloom, Danville, CA Sun Nov 18, 2012

We were in escrow. The day we were to release continguencies or cancel purchase agreement (Day 17), we sent seller CAR CC with reasons: Seller Improper Disclosure. Non-disclosure; As permitted by paragraph 14 and Calif Sec Code 1102.3.
(Seller gave us Disclosures that were not correct; Seller did not disclose water leaky pipes causing damage upstairs bath and dwnstairs ceiling den. We sent Seller Addendum to correct misinformation on TDS and SPQ. Seller again refused to disclose water intrusion. Seller stated CLUE report false yet Seller paid $500 deductible to Ins Company Dec 2009 for water intrusion verified by Ins). Thus, we sent the CAR CC document which Seller agent advised Seller not to sign. Seller made up new CAR CC with paragraph 1 "mutual agree cancel" and instructed escrow to return our $10,000 earnest deposit, Seller will pay $695 home inspection fees. Seller threatened to keep $10,000 earnest dep unless we sign Seller CAR CC. Seller said Seller gave us NBP but did not.

Help the community by answering this question:

+ web reference
Web reference:


Pacita Dimac…, Agent, Oakland, CA
Sun Nov 18, 2012
So you want to cancel the contract

And you say the Seller will pay the $695 inspection fee. Is this what you are asking they pay you back, or is this something the Seller wants to reimburse you in return for you agreeing to signing the cancellation?

What is the difference between your cancellation and the seller's cancellation?

Seller may not keep the $10K deposit -- first of all, it won't be released to seller without mutual consent anyway. But at the same time, you can't get it back without seller's consent either.

And as long as the property is in escrow/contract, seller may be unable to enter/close the next contract as long as yours is in force.

Perhaps you should initiate mediation/arbitration if neither party is willing to compromise.
1 vote
I see.....the seller probably objected to your wording of "improper". In your cancellation, all you needed to state was "As permitted by paragraph 14 of purchase agreement " to cancel the escrow. Details of your cancellation, regardless of what is in it, is not public nor shared with other buyers. The seller and the agent can say anything about why you backed out (and you would never know nor hear about it). If you want to move on and away from this situation, and since the seller is reimbursing your deposit, paying for the inspection and giving you $500 there any objection as to why you won't take this? What does your realtor say?
Flag Wed Nov 21, 2012
Buyer created on Day 17 deadline release of contingencies date CAR CC stated in paragraph 1 reasons for Cancellation: As permitted by paragraph 14 of purchase agreement and as permitted by Civil Code Sec 1102.3. Seller improper disclosure. Seller non disclosure.
Note: Seller has agreed to pay us $10,000 earnest deposit, $500 cash, and $695 inspection fees only if we sign Seller "clean" mutual agreement CAR CC.
Flag Sun Nov 18, 2012
Bernard Gibb…, Agent, Danville, CA
Mon Nov 19, 2012
I don't quite understand the problem here. You want to cancel the contract and get your deposit back. The seller did not like the way your cancellation was worded so they wrote their own version with the "Mutual Consent" checked - which is absolutely normal and typical, by the way.

If you sign their cancellation, escrow will release the deposit to you. Everything else is irrelevant.

So sign it and everybody is happy. End of story.
1 vote
Tina Lam, Agent, San Jose, CA
Sun Nov 18, 2012
If you have a mutual cancellation with instructions for escrow to return your deposit and you don't sign it, then escrow must hold on to the deposit per standard CAR instructions. It's not a threat, just procedural. You should discuss with your real estate broker how this should be handled as we're not in position to offer you advice.
Web Reference:
1 vote
The Medford…, Agent, Fremont, CA
Sun Nov 18, 2012
Without seeing all the contractual documentation, it’s impossible for anyone here to offer concrete advice. To be honest, I’m not sure what you are asking. If you have not removed your contingencies, then the buyer technically does not have a claim to your deposit.

It sounds like you wanted to cancel the contract by sending a Cancellation of Contract, but the seller was not willing to sign the one you originated. Instead, they filled out one of their own and asked you to sign theirs – but it sounds like you don’t want to sign theirs either. You might have a stalemate on your hands.

In the meantime, the Tina pointed out, no funds can be released from escrow by you OR the seller until you agree on a Cancelation of Contract (with instructions to escrow) and both sign it. Additionally, the seller cannot proceed with a new buyer until this is resolved. To do so would place them in extreme jeopardy.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more