How and When to Cancel Escrow and Contract?

Asked by cathy0927, Los Angeles, CA Tue Feb 25, 2014

I am a seller and my agent is doing a dual representation. I believe he is being less than truthful with me and appears to be only interested in collecting his increased commission, to my detriment. He continuously fights me when it comes to the buyer performing within the parameters of the contract. Now it's looking like escrow will not close on time. I need to protect myself and would like to know what documents would I serve, to whom AND precisely when, to be able to cancel the contract should I choose if buyer does not performed by close of escrow Monday, March 3rd? My agent said it would be a Demand to Close, but that this doc is served AFTER the date escrow is scheduled to close, not beforehand. That's not my understanding, and I believe this to be yet another of his continuing lies to try to stretch this out. If I should choose to cancel I'd like to be able to do so as early as legally possible. Also, any legal ramifications if buyer doesn't timely perform and I cancel?

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10
Dan Tabit, Agent, Issaquah, WA
Tue Feb 25, 2014
Cathy,
You have a lot going on and there is no standard, "kill the deal" form that applies in all circumstances. You are going to need an attorney to review everything and advise you. If another agent gets in the middle they could be sued for interfering with a contract.
Now, you should be aware of a couple of things before you proceed. Killing this deal and getting back on the market with another agent means that you are at best 30 to 45 days out of closing, IF another offer shows up right away. Unless you feel your home has gone up in value or you accepted too low of an offer you'll be out another mortgage payment and there are no guarantees the next offer will be better.
Next, if your agent isn't representing you properly, they report to a managing broker who is responsible for their actions. You may want to take your concerns there for a full airing and discover what your options are from the companies stand point.
Finally, mortgages are commonly running behind. Some of the Big Bank lenders are notorious at missing closing dates and some of the national online ones aren't much better. This doesn't mean it won't close, but it may close a few days late, which would be sooner than starting over.
It sounds like your mad, and I don't blame you. Before you make a decision in haste, consider what your goals are and the best way to accomplish them, either through your agent or in spite of them.
We aren't lawyers, so if you want the "legal" way to cancel and to know the ramifications, you'll need to spend some money with an attorney, and don't forget to bring all your paperwork.
1 vote
Cathy,
Thanks for the additional information. You've received a lot of answers and offers for help. Why don't you call this agents office and speak to their managing broker. Your business technically belongs to them and if I had someone feeling like you do, with an agent who works for me, I'd like to know about it. There are several options available to the broker, including evaluating the truth about your transaction. If you are just a few days from closing, they can tell you. If it's messed up beyond repair, you'll more than likely find out and be in a better position to decide your next course of action.
I'm very sorry for your situation.
Flag Wed Feb 26, 2014
To clarify, the listing agreement has expired. I understand you cannot give legal advice. However, realtors should know what documents to serve, when and to whom, if one's client wishes to cancel an escrow. This agent continuously tells me blatant lies and I simply have no further trust or belief in him, and he is certainly not doing his best to fairly protect and present me or my interests as the seller. As disgusted as I am with this agent, I prefer to close the deal, but not be stepped on, lied to and taken advantage of in the process. The property is quite valuable so if push came to shove, I'm not concerned as far as re-listing goes.
Flag Wed Feb 26, 2014
inna ivchenko, Agent, Calabasas, CA
Mon Nov 24, 2014
I believe, it is NTP( Notice to Perform). In your situations it is NBP: Notice to Buyer to Perform that states that in accordance with the terms and conditions of RPA( or another agreement you want to refer to), Buyer should < take a specified contractual action> or cancel. The form can be served any time if the buyer does not perform according to CA RPA and its ADMs. Do read all forms. Everything is there(all terms are very specific!) and all is signed by both principals and your agent.
Good luck.
0 votes
Kawain Payne, Agent, Seal Beach, CA
Mon Mar 3, 2014
IF buyer is not performing, you have every right to issue a notice to perform.

If buyer fails to perform , you can cancel escrow. In your case since your agent is working in a dual agent role this can get tricky.

The the buyer will also need to sign the cancelation of escrow forms in order for the escrow to be canceled. If both parties do not sign the escrow can not be closed and you can not open another one.

Kawain Payne, Realtor/Notary
0 votes
scottyp818, Home Buyer, Woodland Hills, CA
Wed Feb 26, 2014
Cathy there are a couple things has buyer removed All contingencies? Why are you being.told it won't close on time? Is it due to buyers financing? If buyer has not removed All contingencies then you can send a notice to perform. This would give buyer 48 hours to do so. If buyer fails to perform you will have the right to cancel. I can't give legal advice however I am a realtor in Encino and can maybe give you some insight on how the contracts work. Feel free to contact me.
Scott Pinkerton
Wish Sotheby's int realty
Cabre#01338387
818-285-5156
0 votes
Don't know why this is showing me as a home buyer, instead of a home seller.
Flag Wed Feb 26, 2014
Yes, all contingencies were removed, although it took me to force the agent to give the 48 hour Notice to Perform for this to be accomplished, and this was after the buyer was 2 weeks late in removing this contingency. (And after having the agent yell at me for 2 hours trying to convince me not to give it.) Buyer is out of the country (again) so can't sign until Friday/over the weekend.
Flag Wed Feb 26, 2014
Cindy Davis, Agent, San Diego, CA
Wed Feb 26, 2014
It sounds like this is a situation with built up issues over time. Dual representation is rarely a good thing...

At this point, my best advice would be to speak the agent's broke, and explain your concerns, Perhaps the broker can arrange to have another agent in the office work with you until the deal closes.

I would also obtain critical information about why the deal is running late. Has the buyer done everything he or she needs to do? Is this a case where the lender is behind schedule? If you're being help up buy a lender, it's not the buyer's or the agent's fault. You can even call the lender yourself and try to get an update.

Real estate transactions don't always close on time..and 9 out of time times..it's the lender....so check it out before you think of canceling,

Best of luck.
0 votes
I actually did call the lender myself last Friday and my agent called and yelled at me again yesterday for having called the lender. He said I had no right to call the lender, that the lender works for the buyer - not me - and that I had breached the buyer's confidentiality (even though I announced who I was and the lender felt compelled to speak), and he said if the buyer doesn't get the loan now, they can blame it on the fact that I called and something I said would have caused the underwriter to decide not to give the loan. He also said I've set it up to where if the deal doesn't call, the buyer can say it's because I called and get all his ernest money back.
Flag Wed Feb 26, 2014
Lance King, Agent, San Francisco, CA
Wed Feb 26, 2014
If you aren't happy with the way your agent is performing you should speak to his broker to try and straighten things out.

Unfortunately I can't advise you specifically on this since you still have representation, but if you want to cancel the listing agreement and cancel the deal you should speak to a real estate attorney to make sure you don't do anything that leaves you beholden to paying the agent even if you don't make the deal.
0 votes
Great advice about seeking out an attorney's advice. The listing agreement has expired, so I am no longer under contract or being represented. I will follow that!
Flag Wed Feb 26, 2014
Alexander Gr…, Agent, San Jose, CA
Wed Feb 26, 2014
You are asking legal questions and only an attorney can give you legal advice. I would recommend you contact a real estate attorney if you want advice. Email me if you need anything further.

Alex Greer
Loan Officer
NMLS #1056079

http://www.TheMortgageOutlet.com
408-352-5147
AGreer@TheMortgageOutlet.com
0 votes
Trevolyn Hai…, Agent, Highland, CA
Wed Feb 26, 2014
Going to the broker and expressing your concerns is a good idea and probably the easiest and fastest way to help get the results you want. Everything the agent does is the responsibility of the broker and the broker will not want any issues that could effect them legally or otherwise negatively. The broker can then give you a different agent to work with on your side (they will share in the commission). The DCE can be served anytime (but it wouldn't make sense to serve it too early) and the wording on it states that escrow has to close within 3 days (if that box is checked) or different amount of days (if that box is checked) after receipt 'but no earlier than the agreed upon Close Of Escrow date'. After that and if you have also fully performed, you can immediately cancel and you maybe able to keep their deposit if the buyer has released all their contingencies (including their loan contingency). They do have to agree to the release of the deposit to you in the cancellation. If they don't, and depending if you signed the mediation/arbitration clause, you can take it to court (if the amount is under $10,001 you can go to small claims court) and let a judge decide.
0 votes
By the way, I have no idea why I come up as a home buyer, I am the seller.
Flag Wed Feb 26, 2014
I've reviewed the DCE document. I see the default time is 3 days. Can one enter 24 hr or 48 hours in lieu of the default 72 hours on that form? If escrow is scheduled to close March 3rd, would it then be February 27th the Demand would be served and, if so, at what point during the day would be best recommended if I wanted to keep my options open to give a Notice of Cancellation the end of the business day March 3rd? (Assuming that's the soonest a Notice of Cancellation could then be served.) Although I know the buyer has defaulted if they do not close by the scheduled date of escrow, I've also heard rumblings if the buyer is a day or two late, even if they received the DCE and the Notice of Cancellation timely, they may still be able to close? Is that true? Seems to me these real estate laws are heavily in the favor of the buyer.
Flag Wed Feb 26, 2014
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Wed Feb 26, 2014
Cathy:

In California, your our contract is with your agent's broker, not with the agent. Unless your agent IS the broker, you should reach out to their broker first thing in the morning. Express your concerns to them and have them help you get to the truth of the matter.

Unfortunately, you are experiencing the precise reason why allowing dual representation, although legal in California, is problematic. A listing agent's fiduciary duty is to the seller (get the highest price, shortest escrow, give the least concessions, etc). A buyers agent's fiduciary duty is to the buyer (get the property for the lowest price possible, close at their convenience, ask for lots of repairs, etc). It is hard to do both as they are so opposite of each other.

So, again, I encourage you to call your agent's broker and get this worked out.

And, also, call your agent and tell them you want to issue a Notice to Perform 48 hours BEFORE the scheduled closing, demanding that the buyer close on time. You do not have to wait until someone does not perform to issue one.
0 votes
Would it be a Notice to Perform or a Demand to Close Escrow? If escrow is scheduled to close March 3rd, if it is a Demand to Close, can that given 48 hours prior to the scheduled close of escrow? (I know the default time on that form is 72 hours.) All contingencies have been removed, including Loan. I just want to be in a position to be able to promptly cancel escrow, should I choose to do so, should the buyer breach the contract and not perform by missing the scheduled closing date. The buyer has missed various dates they were to meet (including being 2 weeks late in removing the loan contingency), so missing the closing date would not be a surprise. He is constantly leaving the country and this escrow appears to be a back burner issue from the behavior I am seeing. Also, I believe the buyer is a developer, which is NOT how the agent presented the buyer to be, and I did not wish to sell the property to a developer if I could possibly have avoided it, which the agent knew!
Flag Wed Feb 26, 2014
Monique & Joe…, Agent, Beverly Hills, CA
Wed Feb 26, 2014
Hello Cathy,

I can assist you. Please email me directly so I can help.

I need to speak with you by phone. Sometimes greed can get in the way of fair representation.

My email and phone are below. I see this happen time and time again and there are actions you can request to cancel or complete the contract but you need someone else sometimes to see it from the outside. Happy to help

Best,

Monique and Joe Carrabba


Monique Carrabba
Realtors, Broker and Attorney
The Carrabba Group
Homes. Investment Properties. Real Estate.
Keller Williams Realty
Realtor + EcoBroker
P: (323) 899-2900
F: (323) 703-1305
mcarrabba@me.com
http://www.carrabbagroup.com
Twitter: @moniquecarrabba
Facebook: moniquecarrabba
Skype: moniquecarrabba
BRE License #01708376
0 votes
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