Is there a time limit on keeping a escrow open in California? Can it got doormat or be cancel without both parties signing off on the cancellation?

Asked by Tanisha W, Long Beach, CA Mon Aug 16, 2010

My seller is trying to back out of our deal they accepted the offer at 300k and signed a contract prior to appraisal but appraisal came back at 270k,,, I signed the addendum then my agent and banking institute both got a verbal from the sellers agent/brker that they agreed to the amended pricing so we proceed and turned in the loan package to get a call 2 weeks later from agent/brker that they have a 2nd buyer willing to over pay for the property so now they want to cancel our deal. I feel dubbed, they relisted property on MLS and had a open house while we were in escrow and now refuse to even refund my out of pocket expenses IE: appraisal inspection, movers, advertising additional rent costs etc... What can i do? Do i have any recourse here?

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Sindy Verdugo, Agent, Long Beach, CA
Wed Jan 26, 2011
My first impression:

Verbal from the sellers that they would lower to the appraised value? In real estate everything has to be in writing. The sale was subject to the appraisal and your bank was not able to appraise it at the value you contracted for. The seller is telling you to go jump in a lake by their actions. The seller is not going to sell it to you at 270k , especially if they can get more. It sounds to me like your only chance is to try to get an appraisal at 300k and keep the deal together at the contracted price. If you can't do that. I don't see any recourse for you. It may already be too late to keep it together.

You can try to take the seller to small claimes for your loss but, not sure how it is the sellers fault your bank appraised it low.

Sindy
Web Reference:  http://www.SindyVerdugo.com
0 votes
Sidika Kilic, Agent, Long Beach, CA
Mon Aug 16, 2010
You didn't indicate whether or not an earnest deposit was placed in escrow, nor whether or not a Notice to Perform was issued to you by the Seller, which would represent the Sellers intent to act as they did. However, in a typical escrow, where a deposit is involved, both parties are required to mutally agree to cancel, and release the earnest depost.

The legal remedies in cases where a buyer has been harmed in the purchase act, resulting in the Seller pulling away from the transaction, are limited, and you should confer with your Broker/Agent or a Real Estate Attorney, to discuss them. An example of such as an action would be a filing for Les Pendis. Such as action would prevent the Seller from negotiating a sale of the property until the legal matter with you is resolved.

However, I would strongly recommend that you contact your representatives to ascertain whether or not all protocal was followed in your transaction. As for the statute of time involving in an escrow, I would suggest that you contact the Escrow Officer involved with your tranaction to inquire about your deposit, which they usually are looking to clear from their books by end of year close-out. Jimmy D. Williams/310-218-9058
Web Reference:  http://www.pruCArealty.com
0 votes
Michael Magaw, Agent, Torrance, CA
Mon Aug 16, 2010
You should ask these questions of your real estate agent. If you are not sure that things have been handled properly, then ask to meet with his Broker.
How long were you moving forward under a "verbal" agreement? Was your agent trying to get the addendum signed and they were stalling? If so, then that was your warning. If you choose to continue, then you need to take some responsibility for that. You could have cancelled escrow if they refused to agree to the new terms in writing.
They may have the right to cancel your contract. Have they given you a Notice to Perform? If so, you then need to perform or they can cancel. Have you removed your contingencies? If so, your deposit may be at risk.
The Sellers have the right to continue to list their property in the MLS in "Back up" or "Pending" status while in escrow. They have the right to continue to market and show the home.
When you open escrow both Buyer and Seller are taking some risk. Seller is tying up their home. Buyer is putting up a deposit, paying for appraisal and home inspection, etc. So you appraised the home, the appraisal came up short, you decided that you wanted a reduced price. If the Seller does not agree, then it is time to cancel escrow. Why would the Seller be expected to pay for your appraisal, movers, advertising, rent, etc.? Did they ever agree in writing to pay for these things if your appraisal came up short?
0 votes
Barbara Robb…, Agent, Long Beach, CA
Mon Aug 16, 2010
Unfortunatety as the other realtor explained, a verbal agreement in real estate is not binding. I agree that it is time for you to call a real estate attorney and get some advice as to what damages you are entitled to if any at this point. From the moment your appraisal came in low, the seller was not obligated to sell it to you at the lower price unless you had gotten that in writing and I hope your agent explained that to you. Both parties however do have to sign off on the cancellation of the escrow unless the contract from the bank states it differently so you need to review your document carefully and a real estate attorney can explain what you can do if anything.

This is not how our business should be handled and I am sorry that this business is so much crazier than it used to be. The banks try to make their own rules and in the old days the seller would either have negotiated the price differential or would have just said if you did not pay the difference then you both would agree to cancel escrow.

Good Luck,
Barbara Robbins-Olexa, Broker
L B Brokerage
0 votes
Oscar Barajas, Agent, Downey, CA
Mon Aug 16, 2010
If they have also approved the addendum in writing for the amended price you have some recourse. The amended price has to be in writing. Moreover, I would suggest reviewing your contract to make sure the request for the amended price was completed with in the allotted time for contingencies. If not you could also be out the Earnest money deposit.
0 votes
Young-Jin Ya…, , Van Nuys, CA
Mon Aug 16, 2010
It depends on your contract. The problem is verbal agreements do not hold a lot of weight, especially in a written contract. I would ask your agent to contact his brokerage Attorney (My brokerage has 2 attourneys on call for instances like this at all times). I am sorry to hear about your situation. Good luck.
Web Reference:  http://MyValleyDreamHome.com
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