I am a VA buyer who canceled escrow (after signing a removal of all contingenies). What are my liabilities?

Asked by Susan, San Diego, CA Sun Feb 1, 2009

Will I lose my earnest money? Did I have a right to cancel escrow due to the seller's failure to complete repairs prior to the closing date?
Reasons for canceling: I waited a long time to receive disclosures regarding the HOA (disclosures I didn't receive until after signing the contingency removal). A few days later, we received serious negative information about the HOA. On that same day (which was two days before our closing date) the seller sent an addendum requesting to extend escrow. They did not sign this form. We felt manipulated by the seller because they contractually agreed to do the repairs, but then via email they refused to complete those repairs until we removed all contingencies. Then, after hastely signing the contingency form, the seller refused to order the work repairs unless we signed the addendum extending escrow. Because the seller failed to complete repairs required by the VA before our closing date, and the new HOA disclosures, we decided to cancel escrow.

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Dawn Lewis, Agent, San Diego, CA
Mon Feb 2, 2009

You should be discussing this with your agent, broker and attorney. Without all the facts I wouldn't dare to comment. You are in a contract with an agent who is representing you and you need to be discussing this with them. Best of wishes.

Dawn Lewis
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Cassandra Up…, , San Diego County, CA
Sun Feb 1, 2009
Is the seller a bank? How long is considered a "long time" to obtain the HOA documents. What repairs were required?

Contractually, you have a 17 day contingency period to recieve, review and respond to all disclosures. If you exceed that period, you lose your earnest money deposit.

If the seller signed the request for repairs document, they are required to do the repairs prior to your final walk-thru. Due to your loan requirements, your Realtor should have presented the seller with a Notice to Perform which would give them 72 hours to complete their obligations or you may cancel escrow and have your deposit returned. Did you Realtor send them the notice to perform?

There is a Cancelation of Escrow form that can settle everything if you can get the seller to sign it peacefully. Otherwise, you may end up in small claims. If you're dealing with a bank, it's hard to say. Sometimes they are easy to deal with and some times they are night mare!

I hope that helps!!!

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