Home Buying in 92677>Question Details

Mikemir121, Home Buyer in 92677

Can the escrow company charge us a fee for cancellation of Escrow?

Asked by Mikemir121, 92677 Thu Aug 26, 2010

We could not get a loan approval for a condo due to the FHA's new guidelines since one of the residents is suing the association. We opened Escrow more than 6 months ago before know anything about this open litigation. We now like to close / cancel and get our money from the Escrow. However, the escrow company is charging us a $200 cancellation of Escrow fee. Is this fee legitimate, since it has been out of our hands to cancel the Escrow?

Help the community by answering this question:


Mike -

Yes they can, typically it is within the instructions and most great escrow companies will not charge anything unless they have paid for items on your behalf such as messenger fees, copies, notary, etc. Depending on the type of Escrow Company, they may be governed by either the CA Dept of Corporations - OR - the CA Dept of Real Estate. DOC regulates Independent Escrow Companies not affiliated with a Real Estate Brokerage and can perform escrow duties for any transaction; DRE regulated RE Brokerage Specific Escrow Companies that can ONLY perform escrow duties for transactions involving the Real Estate Brokerage that owns them.

Hope this helps,

Thom Colby
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END a Transaction in our Brokerage. There is NO benefit to the Seller or Buyer but only benefits the Agent.
888-391-5245 Direct Cell
DRE# 01398570
2 votes Thank Flag Link Mon Aug 30, 2010
It is specific to the instructions and what the State of California allows as their guidlines.
Web Reference: http://www.markandtim.com
1 vote Thank Flag Link Sun Aug 29, 2010
If you signed escrow instructions, you are likely on the hook as they can charge a small fee and any costs inncured. For instance, if the HOA docs were ordered and paid for, they can charge you but you can get that money back if you ask them to charge the next buyer for them and reinburse you when that happens.
1 vote Thank Flag Link Thu Aug 26, 2010
Escrow companies are governed by The Dept of Corporations and have guidelines outside the scope of most Real Estate transactions. It is possible that their contract includes such verbiage. I would read it over carefully and then contact an RE Attorney if you feel they are harming you.

This business is full of paperwork, contracts, and small print...I would have have hoped your Real Estate Professional would have caught something like that before the Escrow company was chosen. remember, in the future, it is YOUR choice and NO ONE Else's, as to who to use for Escrow Services.

Best of Luck...

Stay Blogging My Friends!

1 vote Thank Flag Link Thu Aug 26, 2010
Yes - as long as it is stated in the Escrow instructions you signed. I've always seen cancellation fees stated in the instructions but often times the escrow company will choose not to charge them even though they can.
Web Reference: http://aaronzapatablog.com
1 vote Thank Flag Link Thu Aug 26, 2010
Yes but not that many do. No one wants to work for free.
0 votes Thank Flag Link Fri Aug 21, 2015
If they ordered a condo certificate from the HOA the Management company charged a fee for this. IF they had hard costs such as messenger that they paid they can charge you for these outside fees paid on your behalf. One resident suing HOA might not stop a loan process.
0 votes Thank Flag Link Mon Aug 17, 2015
The fee can not be charged under any circumstances for cancelled escrows..
0 votes Thank Flag Link Fri Aug 14, 2015
It depends, at what stage of timing you are.
Before or after the contingency removal. As well as usually if the agent have normal relationship with the esrow, they usually waive the fee. Hope it helps.

Amir Vahdat | Broker
p: 949-682-9090 f: 949-499-1414
e : amirvahdat@bhhscal.com
w: http://www.OCLuxuryProperty.com
0 votes Thank Flag Link Sat Jul 18, 2015
Yes. And, the $200 will probably not compensate them fully for the work they performed to date.
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Thu Aug 26, 2010
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