Scott, Home Buyer in San Martin, CA

Seller cancelled escrow on the last day (Calif.).

Asked by Scott, San Martin, CA Wed Jun 4, 2008

The sellers decided on the last day of escrow not to sell. Papers were signed and the only outstanding deliverables were the sellers completing repairs (about $500) and my wire-transfer of closing funds. We received a call from our agent saying that the seller didn't want to be bothered. We have about $850 into inspections and lender costs that I am liable for, and will have no property to show for it.

My agent is advising contacting an attorney and that I have a strong case. I did that, but the cost of entry for litigation (file a Lis Pendens, and sue for specific performance) is $15K-$20K and will take a long time (we need a property in 8-10 weeks, not 8-10 months from now). The CA contract also specifies mediation. As a buyer, do I have any recourse to get my inspection and lender costs back ? The seller is very clearly in breach of contract and has failed to perform on their end. And the property was up for rent, so apparently they wer acting in bad faith all along.

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Andrew Paul, , San Diego, CA
Wed Jun 4, 2008
Hi Scott,
sorry to hear about your situation. Based on what you've said, it sounds like you definately have a case. Most CA RE transactions specify arbitration as that will result in the least cost to both parties to settle the dispute.
Small claims court is definately the fastest way to get this resolved and you can pursue another home in the mean time. By the way, you should also contact the escrow office to ensure you will be getting back any good faith funds you may have put down.
A little tactic you can use, which usually works better when money is tied up in escrow, is to keep the property IN ESCROW, until the matter is resolved. Once a property is in escrow, it can't go into another escrow until it has been released. Basically you can tie up the property in escrow and prevent the seller from selling to anyone else until the matter is resolved. However, it sounds like they're going to rent it out.

Bottom Line: There are MANY MANY fantastic properties in San Diego right now that you can pick up at a great discount. I'd file in small claims court- you can use Legal Zoom http://( as an inexpensive legal service for this- and just move on to another property!

Best of luck,

Andrew Paul, CMPS
Superior Mortgage
1 vote
Jim Johnson, , 78233
Wed Jun 4, 2008
I think Denise's reply is good input. If you have 8-10 weeks, you still have time. I'll add that it is very difficult to obtain a specific performance judgment against a seller who occupies the property in question.

Best wishes to you.
1 vote
Denise Gleav…, Agent, Claremont, CA
Wed Jun 4, 2008
Hi Scott,

You can try suing the seller in small claims court for the money you are out. It won't get you the house, but at least a good shot at getting your $850 plus court costs.

I would think you would be able to find another property to purchase in your time frame. Sometimes it is easier to let go and move on than it is to fight it out and have all that extra stress in your life.

Good luck. Denise Gleavey
Coldwell Banker
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1 vote
Lee Lovitt, Agent, San Diego, CA
Wed Jun 11, 2008
You agent should definately take care of this for you and contact the seller's agent for you to get compensated for your losses.

would love to help you find your new home please e-mail
I am an Owner/Broker
0 votes
Scott, Home Buyer, San Martin, CA
Wed Jun 4, 2008
Thanks Jim .... the property is unoccupied currently. And the seller just re-listed it as a rental.

The purchase agreement states that we waive the right to litigation and must use mediation & arbitration. Not clear how to do that.
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