Jennifer, Both Buyer and Seller in Los Angeles, CA

Fallen Out of Escrow after contingencies removed

Asked by Jennifer, Los Angeles, CA Tue Apr 29, 2008

After over of a month of granting extensions on contigency removals, our buyer has cancelled her purchase. My husband and I have decided we want to stay put due to some other circumstances. I know our broker is going to be really upset, she worked on our listing for nine months but cancelling our listing right now is the right thing for us. Our buyer has agreed to release the deposit minus fees already incurred by our open escrow. I dont think our broker has any claim to our liquidated damages. If this is the case, I'd like to give her something. Is this customary?

Help the community by answering this question:

+ web reference
Web reference:


Keith Sorem, Agent, Glendale, CA
Tue Apr 29, 2008
I would call her and ask to meet with her personally. Be honest and let her know first what a great job she is doing and that you appreciate the qualities that have gotten you this far.

Then explain that the purpose of selling your home was to..... and that your circumstances have changed. Now, after careful consideration, you and your husband are thinking of......

I think that giving her the names of some people whom you know could use her services would be very helpful. So far as the liquidated damages go, offering to reimburse her for some of her expenses I do not think would qualify as a commission (therefore not triggering a broker's share).

I agree with the others, these are trying times and thoughtful, loyal clients are very much appreciated.
5 votes
Sylvia Barry,…, Agent, Marin, CA
Tue Apr 29, 2008
Hi Jennifer:

I agree with Keith completely. Explain to your agent about why you have changed your mind about selling, acknowledge her hard work and how much you appreciate her effort, expertise and loyalty to you. In return, you will also be loyal to you and that you will definitely be using her when you decide to sell again.

I will understand it if she is disappointed after working so hard, and doing such a great job for you that you have decided not to sell. However, most of agents know that selling a house is a big decision and that circumstances do change; especially after 9 months. So, I think she will understand.

I also think she'd ecstatic if you give her something to show your appreciation. Like Keith said, a check to reimburse some of her expenses will not be considered compensation and the brokerage shall not be sharing that. And I bet she'd be very pleasantly surprised that you are considerate enough to do so - a client we all wish we have. If there is not much expense (which I seiously doubt, especially after nine months), you might want to give her a gift certificate to go to a fine restaurant.

Referrals are what we all love, but if they are not happening for a couple of years, it might not have the immediate effect you are looking for compare to other suggestions. .

Thanks for sharing, Jennifer!

1 vote
Laarni G. Om…, , Orange County, CA
Tue Apr 29, 2008
Hi Jennifer,

In our industry, this is the nature of the beast. We do not earn our commission until the escrow is closed and recorded. Do what is right for you and your husband and the best thing you can do for your agent is to refer her to your friends and families to make up for the lost sale. Good Luck to you.
1 vote
David Hitt, Agent, Los Angeles, CA
Tue Apr 29, 2008
No this is not a customary scenario however it is very thoughtful of you. Your agent may be upset but ultimately in the end your interests come first. If you do decide to put your house on the market again you should definitely re-list with the same agent unless there was some reason you were unhappy.
1 vote
Alan May, Agent, Evanston, IL
Tue Apr 29, 2008
Jennifer, you are that rare client who after 9 months of trials an tribulations still has room to consider the feelings of others. You're a gem.

In my opinion, the thing that your agent would appreciate most is a letter to her managing broker, stating how wonderful she was during this whole trial, that you don't hold her responsible for the failure of the transaction, rather that you know she worked hard, gave good advice and counsel, and is a quality asset to the agency.

If in addition you'd like to give her a gift of something soothing (maybe a massage, or spa day?) I'm sure she wouldn't decline.
1 vote
Ute Ferdig -…, Agent, New Castle, DE
Tue Apr 29, 2008
Hello Jennifer. Sorry to hear about the escrow cancellation, but it sounds like you are at peace with that since you have decided to cancel the listing. You are absolutely right, your agent does not have a direct claim to the deposit, but it sounds like the listing agreement has not yet come to an end and you are not going to wait until it expires. You want to cancel the listing agreement now and I think giving the agent something for all her efforts would be nice as she probably spend not only time on it but also some advertising $$ and she does not have to agree to release you from the listing agreement prematurely, Frankly, it is relatively rare that a buyer will have no way out without losing the deposit and sellers don't end up with the buyer deposit in most cases. It looks like your agent did a good job at protecting your interests and I think it's nice for you to recognize that and to want to share part of the deposit with her. Hopefully, when you are ready to list again, you'll go back to this agent. Good luck.
1 vote
Joan Patters…, Agent, Rancho Cucamonga, CA
Tue May 6, 2008
Hi Jennifer,

Wow, you are so considerate of your agent. When I have sellers like you, it truly makes you feel good when you get something. I have had sellers cancel because circumstances changed and they have asked me how much I have into their transaction and have actually given me a check. They don't even ask for receipts or anything which made me feel great that they trusted me that much. I certainly would reimburse your agent for those types of things such as advertising, or whatever else they have done for you. You could also give her a gift certificate somewhere on top of it to show your appreciation like other agents have mentioned. Most of all, if you tell her that you will be using her in the future if you sell that will mean a lot to her too. Things like this happen all the time and agents know going into a listing that it may or may not sell. I have actually gone into a house and staged my listing and then my clients changed their minds about selling because I made their house look so great! And, they have reimbursed me for all my time and efforts. Later on, when they do sell, they remember if the agent was nice about letting them out of the contract and it pays off if they are kind about it.
Good luck and she is lucky to have you for clients!

Joan Patterson, B.A., A.S.P., G.R.I., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
0 votes
Laarni G. Om…, , Orange County, CA
Tue Apr 29, 2008
Hi Jennifer,

I would write a letter of cancellation and e-mail or fax it to her especially if your original listing agreement is expired. You really don't need to explain yourself. Just make it short and sweet and don't get pushed over. You, of all people, know what is good for you and your family. And like what the other agents said, if you relist it next time, then call her and help her to get more clients. That's the best you can do for yourself and that's the best you can do for your agent.
0 votes
Jennifer, Both Buyer And Seller, Los Angeles, CA
Tue Apr 29, 2008
Hi again, this is a follow-up from the orginal poster. First off, thank you very much for your responses. I'm really nervous about telling our broker that we want to cancel the listing (at present the listing is on HOLD). I know she's going to be upset. I work in sales and I know what a difficult thing it is to spend a ton of time on something that never closes. We do intend to use this agent when we re-list in the future. The fact that we were able to get the liquidated damages on this failed sale is squarely due to her persistence in making sure the contingenies were removed as quickly as possible. I know it is extremely rare for buyers to bail knowing they are going to lose their deposit and i can't believe they've agreed so easily to release the funds.

I think part of the reason I feel like we should give her something is because we are getting the liquidated damages (the 3% deposit minus costs incurred by the escrow company) and she's getting nothing. I know it's the nature of the business that things fall apart and I suspect I'd feel differently if we fell out of escrow without getting anything from it. I feel strongly that we wouldn't be getting these liquidated damages if she didn't push the removal of the contingenies along so aggressively.

I was speaking with another broker yesterday who told me that if we give her cash, she might be obligated to give some of it to her brokers office, just like she would have had the sale gone through. It is for this reason that I want to give her a gift certificate so she doesn't have to share that. I was thinking about a gas card.

How do I break the news to her in the kindest way that we want to cancel? I don't want an arguement and I think that's what we are going to get when we tell her. I've been very happy with her as an agent because she is very aggressive when it comes to business matters. I have issues with her aggressiveness with me on the personal level.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more