My Broker is telling me that I have to pay the escrow deposit NOW, even though the Short Sale Agreem. states otherwise. What to do?

Asked by Contraclaustro13, 93012 Tue Aug 24, 2010

The Short Sale Agreement states under 3. TIME PERIODS, that, " Except for Approval Deadline, all time periods for inspections, contingencies, DEPOSIT(S), and other obligations under the Contract shall commence from the date the Seller delivers written notice to the Buyer that the Contract has been approved by the Lender"; however,
My not trust worthy Real Estate Agent (Listing Agent) tells me that on the escrow this does not apply and that I have, as the contract states, 3 days to give him a check for $XX,XXX to deposit as escrow...
Is he correct?
if he is doing this deliverately to have me on the hook, what can I do to report this?

Thank you all for beforehand for your response.

Help the community by answering this question:

+ web reference
Web reference:

Answers

12
Team Komar, Agent, Camarillo, CA
Mon Sep 20, 2010
Darla-

Buyer beware. Be very careful what your being asked to do. That is normally only done when your
short becomes approved by the lender.

Give him JUST a copy of the check.

Good luch Darla.

Ray Komar
BROKER
Camarillo
0 votes
Darla Dennis, Agent, Camarillo, CA
Fri Aug 27, 2010
Hello Contraclaustro 13,
Communication is the most important component when working with your Real Estate Professional. You are hiring an agent and They work for YOU! If you feel like you don't understand, keep asking until they help you to understand. If you don't trust them, and you feel like something isn't right, then you should let them know. Communicate how you feel, If they do not listen, then you should probably look for a new agent.
You can tell the agent that you are not comfortable and you are moving on unless something changes.
Yes, your agent is a professional and knows the Business, but you get to decide if they are right for you.
The Consumer decides where to shop: Albertsons, Vons or Ralphs, Costco or Sams, Macy's or Nordstrom-, Kmart or Target. You are the consumer here and this is one of the biggest decisions of your life. Be sure you know and understand what is going on! Good Luck.
Web Reference:  http://HomesbyDarla.com
0 votes
Ted Mackel, Agent, Simi Valley, CA
Tue Aug 24, 2010
Contraclaustro13,

Great Question, this requires a pretty detailed answer. I created a Video Screencast with the California Short Sale Addendum for you. It may answer some of your questions.

Link to video answer: http://bit.ly/aDrVop

If the agent used the Short Sale Addendum (and they should have), then if the box under B.2 was checked then the agent cannot cash your check until written approval from all lien holders is received. If they cashed your check or required you to deposit the check then they could be violating the Agency Disclosure they are required by state law to give you.

FYI - Since this is a question regarding California Real Estate Law, California requires a California Real Estate license to give advice on these matters.
Web Reference:  http://www.HomeBuysBlog.com
0 votes
Heidi Golff, Agent, Ventura, CA
Tue Aug 24, 2010
Hello again…..Before you throw out the baby with the bathwater by cancelling the contract, ask yourself how badly you want this property. Part of signing a Purchase Agreement is “being on the hook”. While I believe you should hang on to your money until the short sale is approved, I think if you really like this home and can’t easily find another one you like as well or better, you may want to consider honoring the contract until the approval comes in and the inspection phase is in place. If you change your mind at that time, your Purchase Agreement should have been written to allow you to cancel and get your deposit back. If this is a property where you can “take it or leave it”, then bowing out in writing may be the way to go. There are too many short sales out there to be stuck in one you don’t really want or that has undesirable terms. Then please find your own realtor apart from the listing agent; one who has short sale experience for buyers. There are a lot of us out there who wouldn’t put you in this situation.
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Aug 24, 2010
No one can render an opinion for fact the entire sales agreement must be reviewed.

DISCLAIMER: In most cases you CAN'T PAY escrow till contract is executed title company has to register the money aka receipt the money DIFFICULT to do without contract. Here in Texas title can't take the check till executed contract is presented therefore they determine both parties followed contract for escrow NOR would they take money UNLESS there is an executed contract.

CONFER with an attorney.

Lynn911.com
Web Reference:  http://www.lynn911.com
0 votes
Barry Shapiro, Agent, Camarillo, CA
Tue Aug 24, 2010
I would recommend you ask the Listing/Selling agent to provide you with a CAR Form WOO immediately, so you can officially withdraw your offer IN WRITING and move on. Find a Buyer's Agent that is experienced in representing Buyers -- interview 3-4 to see if you can find one that you feel the most comfortable with and that excels in the Short Sale arena. Listing agents on Short Sales should avoid a dual-agency relationship scenario, as the Seller's Lender's want to be assured of fair practices.
0 votes
Heidi Golff, Agent, Ventura, CA
Tue Aug 24, 2010
I am missing something from this equation and it has to do with documentation. You say the time periods for inspections, (to be after short sale approval) and deposits are listed under item 3 of the Purchase Agreement. Item 3 of the Purchase Agreements speaks to the deposit only; not to any inspection periods. Anything time frames under item 3 would be superseded by the form SSA - Short Sale Addendum. In the SSA, under item B, the time periods for inspections are listed under B1 and the deposit is addressed in B2. Unless your realtor checked the box under B2 (ii) where it says, “if checked, held un cashed until the day after the seller delivers to buyer a written notice of Short Sale lender’s consent”, then you agreed to put the deposit check into escrow be default. Is your realtor using standard California Association of Realtor documents? I never write my contracts this way, but if it’s any consolation, unless you default on the contract your money should be safe.
0 votes
Steven Ornel…, Agent, Fremont, CA
Tue Aug 24, 2010
Hi Contraclaustro13,

Very good answers below, no need to reiterate.

At this point it sounds like you have two possible scenarios that need clarification regarding:

1) A potential undisclosed Dual Agency, 2) Possible contractual conflicts between the Purchase Contract, SSA, and/or Lender addendum and your understanding.

I would suggest you request to speak with the Agent's Broker to clear up all your questions.

Best, Steve
0 votes
CJ Brasiel, Agent, San Jose, CA
Tue Aug 24, 2010
Contrac...

Based on the information given:
If you added to your purchase agreement a short sale addendum stating all deposits and time periods would start upon approval by lender AND that term was not countered but agreed to by seller AND the seller signed all documents AND no other supplemental addenda were written changing this term, then you should not have to deposit money into escrow until you receive documentation of short sale approval by all lien holders involved (there can 1,2,3 lenders, that need to approve).

However, it is important to review anything you and the seller have signed with the agent's broker. If the agent is the broker, don't deposit money until they can demonstrate why the short sale addendum does not apply.

Good luck,
CJ
Web Reference:  http://www.TalkToCJ.com
0 votes
Ken Wallis, Agent, Ventura, CA
Tue Aug 24, 2010
In regards to your 1st question if your Real Estate agent is correct or not depends on if the clause was countered out or not.

in regards to your second question there is different training for short sales that agents can take and some of them do advise the agents, to have the buyers deposit funds into escrow as soon as the Purchase agreement is signed. It is done as a good faith by the buyer to show that you are going to be patient through the short sale process. If you are not comfortable with it as it sound do not agree to it.

You mention that your agent is not Trust worthy? Buying or selling a home is one of the most stressful thing done in life and you should feel comfortable with the agent you are working with. if you are all ready feeling that the agent is not trust worthy you have to ask yourself is this going to be the best fit for you in making a big decision to buy a home.

if you would like some free infor mation on buying a home visit

http://www.ventura-county-homesales.com
0 votes
Mark Thorngr…, Agent, Oxnard, CA
Tue Aug 24, 2010
Thanks for your question!

In order to properly answer your question, we would probably need to review your offer to see what the terms and conditions include. Often banks have their own conditions which conflict with CAR forms.

Your agent may be working under constraints you are not aware of to help you..... Or not.

You have received several very good answers already.

My immediate concern would be, are you working with someone you feel you can trust?

If you are not working under the conditions of a Buyer Representation Agreement, you may want to consider if you are comfortable continuing with your current business relationship.

There are many dedicated and competent agents in Ventura County as you have already seen.

Take Care,
Mark Thorngren
Web Reference:  http://www.markthorngren.com
0 votes
Annie Nguyen, Agent, Fremont, CA
Tue Aug 24, 2010
Hello C.,


Are you the buyer or the seller/ You stated your agent as Listing Agent. I wonder if your agent acts as dual agent for the transaction. For the record, if you are the buyer and the seller delivers the writen notice of approval from the lender and you actually receive it and sign on the document. Then 3 business days from the date you receive the notice from the seller, your agent has to deliver the check for the earnest money to deposit to preescrow account the title company. In the shortsale addendum your agent must check the box in the section 2 which states the " Buyer's deposit check shall be held uncashed until the Day After the Seller delivers to Buyer a written notice of Short Sale Lender's consent" Please notice the capital letters being used in the sentence to let you know that really emphasizes the matter has to be take in greatly consideration in your written offer to purchase a shortsale property. If you have more question please feel free to contact me so I can answer your question. Good luck
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more