What happens if due to sellers delays (i.e not fixing items from title report) escrow is delayed and my loan lock expires. do I have any recourse?

Asked by Gonzalo, California Wed Jul 13, 2011

Contract signed with 30 days escrow. I secured and locked a rate for a loan, got all approvals, did and paid for inspections, removed contingencies. Seller had to be served with notice to perform due to non response to deliver disclosures, dragged their feet on title issues (i.e building permit outstanding, etc) and as result, the close of escrow has to be extended. Because of this, my lock will expire and the interest rates are up causing the bank to ask for money to extend the lock or face a higher interest rate. What is my recourse. I feel I did everything right and prompt.

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10
Jim Walker, Agent, Carmichael, CA
Wed Jul 13, 2011
The answer from Maripat and Bob Flood is confusing because they do not realize that closings in California are handled by escrow companies, not closing attorneys.. The Floods are Florida real estate agents. Please disregard the closing attorney part of their answer. If you want a lawyers opinion, you can seek one out. Neither the escrow officer nor the real estate agent can give legal advice.

Give the real estate agent that is supposed to be representing you, Gonzalo, a chance to try to answer this question, He may also suggest asking an attorney.

Keep in mind that the cost of an attorney may be significant.

None of the real estate agents here on Trulia will want to give you specific advice or legal advice because we would be stepping into a pile of liability if we did so. -- We're not going to take on that kind of responsibility for a few Trulia Voices points.
2 votes
Mack McCoy, Agent, Seattle, WA
Wed Jul 13, 2011
I agree with Jim (as usual), but I'm willing to add some non-legal advice: any "recourse" you might have, unless specifically provided for in your purchase contract, will require that you have an attorney.

The fact of the matter is that sellers are not going to put up earnest money or put money up in escrow in the event that they default, that's just as likely to happen as Lady Gaga going country.

"Recourse" comes about when the default position is unsatisfactory. For example, the default position if you didn't hold up your end of the bargain is that you'd forfeit your earnest money. The default position for the seller is typically, "Oh, well."

Your agent would be able to advise you best on how to proceed from here.

All the best,
1 vote
Jay Emerson, Agent, Fair Oaks, CA
Wed Jul 13, 2011
Your agent should have negotiated a lock extension from the seller. The seller may be in breach of contract. Talk to your agent and his/her broker immediately.
Web Reference:  http://JayEmerson.com
1 vote
Bud Zeller, Agent, Folsom, CA
Sat Nov 12, 2011
Are working with a real estate agent? What does your lender recommend? Did you get a legal opinion?
0 votes
Candy Wall, Agent, Coloma, CA
Sat Nov 12, 2011
late to the party..

Did the seller sign to extend the escrow? If your lock expired could you have been in a better place by renegotiating your lock? rates have been downward since July.
Most transactions are dependent on intention and earnestness, by now you may have exited or happy ending to you, I pray you are stained in a good way by the home buying experience.
0 votes
Lance King, Agent, San Francisco, CA
Thu Jul 14, 2011
BTW - what is the cost of the rate lock extension?
0 votes
John Arendsen, Agent, Leucadia, CA
Thu Jul 14, 2011
There are times when you need to seek legal advice. But you really should weigh the numbers involved. How big of a deposit was it? How much will it cost to retain and attorney? How much will the attorney take out of any settlement they might negotiate?

There are other ways you may want to consider i.e. speak directly with the agent's broker. File a complaint with the DRE. Or you could even log onto http://www.legalzoom.com. I have received a tremendous amount of help on this site including forming my own LLC's and corporations.
0 votes
Lance King, Agent, San Francisco, CA
Thu Jul 14, 2011
Gonzalo,

As pointed out by others we are not attorneys and precluded from giving legal advice, but based upon your rendition of the facts here are my thoughts:

Given that the seller has caused you extra expense, I would think that you would prevail in any legal battle over the seller retaining your deposit if you backed out of the deal. If you are prepared to follow through on bailing out of the deal you could use that as leverage to get the seller to pay for your lock extension, which he/she could credit you through escrow.

There are many attorneys who will give you a free initial consult or one for a reduced fee, and this should be a very simple question for them to answer without a lot of time involved.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes
Maripat & Bob…, , Sarasota, FL
Wed Jul 13, 2011
Your best bet at this point is to hire an attorney to represent your interests, and promptly. Your Realtor is not allowed to give you legal advice. Usually, any extension of the Closing Date requires both parties - Buyer and Seller - to approve it, in writing, as it is a modification of the original contract. If you already have an attorney for the closing, ask to speak directly with your attorney - not just the legal assistant who may be handling the closing - to discuss your legal options, and recourse, at this point. Be aware that if the Seller is paying for the closing attorney, that attorney may have a conflict of interest about giving you advice regarding your rights and best course of action, and you should get your own attorney due to the existing dispute between you and the seller. Good luck. Best regards, Maripat Flood, J.D., Realtor, Michael Saunders & Company
0 votes
Bud Zeller, Agent, Folsom, CA
Wed Jul 13, 2011
Please clearify if you are working with a real estate agent and what bank is involved.
0 votes
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