Cameron Wu, Both Buyer and Seller in Los Angeles County, CA

Escrow - unilateral cancellation and having multiple open escrows

Asked by Cameron Wu, Los Angeles County, CA Sun Jun 3, 2012

I have a question regarding Escrow rules and I have not been able to find any clear answers regarding my situation. I am the seller of a property and entered into Escrow with a buyer and the transaction fell through. It is now 36 days passed its closing date and the Buyer refuses to sign off on the cancellation documents. I have another offer on the property and I would like to enter into Escrow for this transaction. Is this permissible to have two Escrows open? My other escrow is being held hostage by Buyer and I really need this other transaction to go through. Buyer refuses to sign and take the earnest money deposit back.

Does Escrow automatically lapse? The close of escrow was supposed to be April 27, 2012 and the signed purchase agreement specifies that Close of Escrow would occur on that date. I wish to remain compliant with the law before I enter into Escrow again.

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9
Jeff & Kelly…, Agent, Las Vegas, NV
Tue Jun 5, 2012
Hi Cameron. It is my understanding that the contract lapses since there is no extention. Again, call escrow directly, get both agents and their brokers together to resolve. Even if you close it somewhere else, doesn't mean the original Buyer won't threaten a lawsuit or make your life miserable in another way.
1 vote
Chris Newton, Agent, Las Vegas, NV
Sat Jul 13, 2013
Hello Cameron,
If you had a contract that a transaction would close on a specific date and it didn't, then it seems to me that the transaction is void. The contract should spell out what happens to deposit.
You say that the bank added $3,000 to the purchase price, that is a change to the terms of the contract. If the buyer is not ok with these last minute changes (and did not agree in writing) then you have no contract and everybody walks away. If buyer doesn't want to get their money back then it is their problem but you should view that date (the cancellation date) as your opportunity to re-market the property (now with the added knowledge of liens and what the bank will accept as a bottom line).

I have looked at your previous questions in the past ( it seems some are as a seller and some as a buyer) and I believe that you are only giving members of this forum parts of the information that will generate the answers you are looking for.
See the bright side of things: now that you know what the bank wants as a bottom line, you can work out a winning transaction with the next prospective buyer.
Good luck! Sounds like you need it...
0 votes
Cameron Wu, Both Buyer And Seller, Los Angeles County, CA
Tue Jun 5, 2012
Hi Kelly. So it can be sold at the new escrow company, even though the other one is not cancelled? What if Buyer doesn't sign cancellation by the time the new escrow is ready to close?
0 votes
Jeff & Kelly…, Agent, Las Vegas, NV
Tue Jun 5, 2012
Hi Cameron. You can open a new escrow. Typically agents do it at a different title company so there are no hang ups. This is really something your agent will need to work through with the buyer's agent, escrow and your lender. Good luck.
0 votes
Becky Zisk, Agent, Henderson, NV
Mon Jun 4, 2012
There is no reason that I can see why you haven't received your earnest money back. At this point, I would prevail upon your agent and the buyer's agent to get this situation dissolved. Before incurring legal expenses, I would pursue that avenue and also, if necessary, have the agents brokers get involved. You could always go into mediation but that takes time and you do have another willing and able buyer. Try letting the agents and their brokers work this out for you.

Becky Zisk
Las Vegas
0 votes
Cameron Wu, Both Buyer And Seller, Los Angeles County, CA
Mon Jun 4, 2012
Original question poster here. Thank you for all of your responses so far. Here are some additional details regarding the cancellation. I was ready to sell and buyer was ready to buy. Each had performed their respective duties pursuant to the purchase agreement. On closing day, the bank notified the buyer that there was an additional $3,000 dollars of HOA liens against my property and would not accept the deal unless Buyer paid the liens off. Buyer refused, Bank refused, and I was unable to pay the liens off myself.

So in a nutshell, bank refused to approve the shortsale because their net amount would fall below the stated bottom-line number as designated in the contract. All parties refused to budge and that's what caused the transaction to not close.

Additionally, a provision in my contract called "Closing Date" under the "Escrow" heading stated that "Close of Escrow will occur on April 27, 2012" - I'm not sure if that actually CANCELS the escrow automatically. My gut feeling is that it doesn't, but rather just states the appropriate closing date.
0 votes
Damon Bottic…, Agent, Las Vegas, NV
Sun Jun 3, 2012
The reason you can't find a clear answer regarding your situation is because your question is about a contract between you and the buyer. The "rules" that address your situation are printed in the pages of your contract. If your agent or their broker can't help you navigate the situation, it's time to seek advice from an attorney. Without reviewing the contracts and the circumstances leading to the non-performing buyer, any advice you get here is worth exactly what you paid for it (nothing).

Yours is a scenario where it pays to have a good agent on your side...probably not something most sellers consider when they are choosing the agent they want to sell their home. This is one of those situations where the best advice should be coming from the folks who are being paid for it...your agent and/or attorney.
0 votes
Suzie Marqua…, Agent, Las Vegas, NV
Sun Jun 3, 2012
Cameron
This is a unusual situation. I would get the brokers from both side talking and ask for their direction to solve this issue.Also talk to your escrow agent to see if they have any suggestions. I was involved on the buying side of a similar situation. No one would budge so we had to move on to another house. If there is no resolution you will need to seak legal advise. Good luck. I am always available to answer any questions you might have.
Thank You
Suzie Marquardt
SuzieM@RealtyOneLV.com
0 votes
Terry Bell, Agent, Santa Rosa, CA
Sun Jun 3, 2012
Well, you don't say why the deal fell through, but my advice is to talk to your agent or your agent's broker and get this settled now. You can also call the title co escrow agent for guidance since they talk to both parties to see if there is an reasonable and easy course to settle the matter. Needless to say, your agent should include the contingency that you must cancel this previous escrow.
0 votes
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