Home Buying in San Diego>Question Details

Francis, Home Buyer in San Diego, CA

Can the Seller cancel Escrow and accept another offer without (myself) signing a cancellation of escrow form?

Asked by Francis, San Diego, CA Fri May 1, 2009

(Short version of what is happening) I have been in escrow for nearly 2 1/2 months because the bank (BoA) can't get their stuff straight and send the correct appraisal correction papers over to the Appraisal. I keep being told that the money is ready and just needs final approval from the underwriter. The seller has re-listed the property and is now taking offers; however, I have not signed any cancellation of escrow because I still intend to close on the property whenever BofA is ready.

Quick Note to Buyers: Get yourself a good Loan Officer. This is the second Issue I have had with BoA with a second Loan Officer.

Help the community by answering this question:


The seller or the seller's agent can provide you with a Notice to Perform. You will be required to perform within the given time period, otherwise they are within their right to cancel.

For example, if you stated in the contract that you would close on May 5, and it is May 25, you may be provided with a Notice to Perform something that you promised on the original contract (that you would close on May 5).

However, think on the bright side, even if they are showing the property for back up offers, if your documents show up in escrow on Wednesday, do you actually think that they are going to cancel and go to a back up offer? Of course not, you will be able to close FAST. Anyone else will need at least 30 days in order to get the deal done.

So, don't lose too much sleep over it. That being said, it may be a good time for your agent and you to put significant pressure on some supervisor at your lending institution.

Good Luck!
1 vote Thank Flag Link Fri May 1, 2009
Dear Francis,

This is why I advise Clients to choose the lender carefully and make sure they can perform within the agreed upon escrow period. I am however surprised that Bank of America is not getting the job done and you may talk to someone higher up. You will need to consult with a real estate attorney who has reviewed your entire transaction for legal advice for a specific answer to your question.

To answer you question in general the Purchase Agreements that most REALTORS use is the Residential Purchase Agreement. - RPA-CA This contract is structured with an active removal for contingencies and deadlines. In the old days most Contracts were passive, for instance if you had a 17 day inspection period, on day 18 your right of inspection went away with no action required. An active removal contract simply means until the Buyer or Seller takes written action on a deadline - the contingency or time frame continues.

When you write a contact you will have a close of escrow date. You will also have time frames for your inspections and investigations and making sure your loan in in place. Many of those contingencies run for the first 17 days from acceptance. Lets say you are a buyer and are now 22 days from acceptance, your inspection and investigation contingencies should have been removed 5 days prior. The Seller can choose to give you a notice to perform and depending on the time frame your Agent has put into the offer you will have 24 hours or more to remove your contingency or cancel. If after that time period you have taken no action the Seller can then cancel the agreement and return your good faith deposit.

Now in the case of an escrow that is overdue the Seller cannot give you a "Notice to Perform" as Melissa Zavala suggested below. Instead they would give you a Demand to Close Escrow. Usually the Courts (Arbitrator) will look at a slight delay of close of escrow, particularly is not directly caused by the Buyer, and challenge the Seller's right to cancel. The more delay in the close of escrow the less likely a Court or arbitrator would favor the Buyer. I guess what I am saying is this is not an automatic thing but the only thing you can do is consult a real estate attorney to review your documents and give you a legal opinion.
1 vote Thank Flag Link Fri May 1, 2009
In regards to Gary Gukassian answer: My loan has been approved and I have every penny and some to pay for a few months worth of perdiem charges which I shouldn't cause I have been ready to close. I have been told that the money is ready to go and it just needs to be cleared by the underwriter as a matter of fact my insurance already began on April 1st which was my original Closing. I will double check all of my papers, but I don't recall ever receiving any notice to perform on my loan. Bank of America has told the seller that the problem is with the underwriter, but they don't want to hear it anymore they just want to cancel.

Mr. Cenedella, I will read through my contract agreement to determine my rights as a buyer and will consult a Real Estate Attorney.

Mr.Douglass, Mrs Zavala, all inspections have been completed all contingencies have been removed. I have been making about 3-4 phone call to each of the following my loan officer, my loan officer's supervisor as well as my real estate agent. I have gone as far as to call the inspector (they have refuse to talk to me, but I have talked to nearly 2-3 managers) to get this thing moving because they (BoA, Loan Officer, Loan Officer's supervisor, real estate agent, appraiser) are all pointing fingers at each other. The house has been valued at whatever the list price was.

Thank you all for your advice I will contact all of the involved party and see if I can get someone higher than the supervisor at the Home Loan Mortgage Center at Bank Of America in LaMesa. I will also consult with a Real Estate Lawyer to determine my right and see what I can do to recover my good faith deposit check if they are unable to close this by Tuesday May 5th 2009.
0 votes Thank Flag Link Sun May 3, 2009
your rights and obligations will be spelled out in the contract. without reviewing the contract, i am can not make any definitive statement about your rights. consult an attorney.
generally a seller needs to be very careful about cancelling a contract and selling it to another party without getting the first buyer's written cancellation.
0 votes Thank Flag Link Sun May 3, 2009
Hi Francis,

It takes only one side to cancel escrow (buyer or seller). However, in order for escrow to release any funds they will need both the buyer and seller to sign the cancellation and instructions on how to release funds.

2 1/2 months is a long time to get your loan approved. I'm guessing the seller has already asked you to perform on your loan. Given the extent of time you have been working on your loan I would say the seller has the right to cancel escrow and accept other offers.

Good Luck.

Also, let me know if you need a dependable loan officer.


Gary Gukassian
Beverly Realty
0 votes Thank Flag Link Sat May 2, 2009
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