Can a seller accept other offers when they have opened escrow with me?

Asked by Dbeckton, 92551 Fri Dec 7, 2012

Can a seller accept other offers when they have opened escrow with me? We missed our closing date because of some complications the lender had which was not any fault of ours. The sellers sent a letter asking us to terminate the contract but I was instructed by my lender not to sign it because "they can't open a new escrow as long as we have an open escrow" But I see the house back listed on the market.

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17
Debbie Demars, Agent, Moreno Valley, CA
Fri Dec 7, 2012
BEST ANSWER
They can put the house back on the market, they can accept another offer and they can open another escrow with a different excrow company. Your money is being tied up in escrow right now. I would suggest that your Lender resolve those complications and convince the Seller you can close escrow NOW. It might then be in the Seller's best interest to move forward and close with you.
0 votes
They cannot have 2 concurrent escrows!! This is a violation and can result in legal issues. A purchase agreement is a binding contract. A seller can accept back up offers and should you not perform they can serve you with a notice to perform prior to canceling escrow.
Flag Fri Jul 5, 2013
Thanks for the help! Getting the conditions approved shouldn't have taken a couple days to be approved.
Flag Fri Dec 7, 2012
Shelly Linde…, , Moreno Valley, CA
Sat Dec 8, 2012
I've had this happen too many times to count. From a seller's standpoint, you have failed to complete the transaction within the allotted time period. Frequently, my seller has given a buyer another couple of weeks to close escrow and the buyer (and their lender) still can't perform.
If the listing agent goes thru the right steps; that is, issuing a "Buyer Notice to Perform" and "Cancellation of Contract," you really don't have big choices. The seller loses money every day you cannot close escrow.
Legally, all signatures must be collected before the next escrow can close. If, however, if you refuse to sign the cancellation and the seller has gone thru the proper steps they could take you to small claims court (assuming the deposit is less than $7500) and force you to cancel and collect a $1000 penalty for refusing to sign and they might even be able to keep all or part of the deposit, depending upon whether or not you signed a "contingency removal."
A seller can accept other offers and they can proceed towards closing. A smart agent would urge their seller to accept an offer "subject to cancellation of previous escrow."
Your lender wants to keep you in the transaction, but he should be very careful about giving you this kind of advice.
1 vote
yes but can the Seller/Listing Agent/Flipper/Selling Agent also, provide cancellation of escrow and request deposit as well as extension perameters without the Buyer countering back with some revisions acceptable and fair to the Seller or does the Seller get to keep the deposit and sell the property to someone else
Flag Thu Dec 31, 2015
Lisa LeQuire, Agent, Moreno Valley, CA
Fri Dec 7, 2012
Why is your lender unable to go to docs?
1 vote
Lisa LeQuire, Agent, Moreno Valley, CA
Fri Dec 7, 2012
The house should be listed with a caveat stating, 'subject to cancellation of current escrow'.

There are many, many reasons a buyer can cancel an escrow. There are very few legal ways for a seller to cancel. The following steps are required for a seller to cancl an escrow:

1) buyer must be in default of agreement (sounds like you are because you are past clos of escrow date)

2) seller must give buyer a notice to perform (or a demand to close escrow)giving buyer 48 hours ( or whatever time frame was agreed upon in original contract. Check what was agreed upon)

3) cancellallation of escrow.

Whether you sign the cancellation or not seller can now cancel escrow.

Signing cancellation of escrow just agrees to where earnest money deposit goes ( your $$ on deposit)

Convince seller you are ready to close. Your agent can do this for you.
1 vote
, ,
Wed Aug 28, 2013
Now you are seeing why buyers should use our company Tri-Emerald Mortgage to buy their homes.

We guarantee in writing to close on time!!! If we don't we pay the sellers mortgage up to $215 a day until the loan does close.

(Bottom line we close on time)

Yes. the whole time your house has been in escrow, buyers have been approaching the sellers trying to get them to break your offer and accept their higher offer. When you did not close on time you broke the contract and they now can take these other offers.

Your great lender (The one who did not close on time, and got you into this mess.) said not to sign the papers because they supposedly can not open a new escrow! Actually, no they can open another escrow, in fact that can even keep your good faith deposit!!! You are the one out of contract.

By not signing the papers you may be able to block them from recording because it will be lien on the property. Hopefully you have tough agent.

So I typed in this great answer and noticed the question was from last year. Well I am going to post it anyway because this is important information.

Bottom line, use Tri-Emerald Lending when buying a house end of story!!!

Rich Littlefield
Tri-Emerald Mortgage
949-297-1207

NMLS 287206
0 votes
Virginia Bae…, , Menifee, CA
Thu Jul 4, 2013
Lisa LeQuire and Shelly Lindekugel both have the best answers. They spelled out the process and the forms that must be used to cancel the escrow for the buyers to retrieve their money. I mentor agents and it is quite refreshing to see agents give accurate information including the correct forms to use for the cancellation process. Lisa and Shelly are to be commended for their perfect answers to the buyers question.
0 votes
Diana Willia…, Agent, Chicago, IL
Sun Dec 9, 2012
They can accept back up offers even if you have open escrow
0 votes
John Juarez, Agent, Fremont, CA
Sun Dec 9, 2012
I cannot offer you any advice but I can state that the real estate market is controlled by lenders. The same lender who does not hesitate to foreclose on a home while the homeowner is trying to do a short sale or modification cannot get a loan approved, documents drawn and loan funded in time to close an escrow. I am talking about national companies, not loan officers or brokers. Do I sound bitter? How do you feel about your experience with your lender? I have seen it happen way too often. Lenders are not held accountable for their inability to perform.
0 votes
Jory Blake, Agent, Norco, CA
Sat Dec 8, 2012
Legally no, only one escrow at a time can be open on a residential property. Until this is properly cancelled using the appropriate car forms and submitted to escrow with all parties signatures.
Question, why are you doing what your lender says and not your agent?
By not performing per contract, the seller has every right to request a cancellation provided he submitted the notice to buyer to perform first (read the purchase contract ).
In a short sale, if lender approval has not been received, the rules are different.
Ask your agent to properly request an extension and have your lender update all parties on a daily basis.

Jory Blake
Web Reference:  Http://www.joryblake.com
0 votes
Bill Triplett, Agent, Moreno Valley, CA
Fri Dec 7, 2012
I would love to help you but I don't know what any of us can do. Is this a special transaction of some kind as things don't sound right at all.

How important is this particular house to you?

Let me know how I can help.
0 votes
Dbeckton, Home Buyer, 92551
Fri Dec 7, 2012
I think that our lender actually drug their feet with some of the paper work near the end because we were told that everything was going great right up until we were to close. Then we were told that the investor wanted to underwrite the loan themselves and that that would delay the process a couple of days. So as of today we were told that the quality control was done now they need to clear the conditions. It just sounds like smoke and mirrors at this point.
0 votes
Bill Triplett, Agent, Moreno Valley, CA
Fri Dec 7, 2012
None of us here know the particulars of your transaction. I would expect your agent to be "holding your hand" through this. Are they laying out options for you? Can the problem be resolved quickly? Will the problem carry to any new transaction on another property?
0 votes
Dbeckton, Home Buyer, 92551
Fri Dec 7, 2012
She's doing nothing. She has told us that she has to wait until our lender gets her the final docks. This is our 3rd property purchase and we ave never run into this issue before, this is totally uncharted waters for us. What should she be doing?
0 votes
Bill Triplett, Agent, Moreno Valley, CA
Fri Dec 7, 2012
Yes. My question would be, what is your Realtor doing and what are they telling you?

Bill Triplett
RealLiving Premier Realty
BillTSellsHomes@gmail.com
951-259-0764
0 votes
Diana Willia…, Agent, Chicago, IL
Fri Dec 7, 2012
They make take back up offers just in case you back out .
0 votes
Nanette Dee…, Agent, Moreno Valley, CA
Fri Dec 7, 2012
Yes they can. They sent you a cancellation. Not knowing the transaction and what paperwork has been sent we cannot say what direction this is going. It will need to be resolved before the other escrow closes. Your realtor would be better to advise you, not your lender, they may not have all the correct info...good luck to you
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Fri Dec 7, 2012
If you do not perform per the contract the seller has a right to cancel and open escrow with someone else.
Choosing the right lender is so important for this reason.
0 votes
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