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Danny_Dao
Posts: 2
Registered: ‎09-09-2012
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What options buyers have if sellers back out of a deal after in escrow for more than 17 days?

Situation: I signed the deal for $500,000. The appraisal is $470,000. I requested the sellers to lower the price by $10,00. Sellers did not want to lower price, and threatened to take my 20% deposit away because the escrow has been opened for more than 17 days already. I then agreed to buy the price as it is in contract. Now, sellers threatened to cancel the deal.

Questions: If buyers back out, buyers lose deposit money after 17 days in escrow. If sellers back out, what options do buyers have?

Thank you so much.

Danny

Regular Contributor
Teknight
Posts: 56
Registered: ‎10-26-2011

Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?


Danny_Dao wrote:

Situation: I signed the deal for $500,000. The appraisal is $470,000. I requested the sellers to lower the price by $10,00. Sellers did not want to lower price, and threatened to take my 20% deposit away because the escrow has been opened for more than 17 days already. I then agreed to buy the price as it is in contract. Now, sellers threatened to cancel the deal.

Questions: If buyers back out, buyers lose deposit money after 17 days in escrow. If sellers back out, what options do buyers have?

Thank you so much.

Danny


What happened to your appraisal contingency? Why on Earth do you have a 20% deposit?

Regular Contributor
Looky-loo
Posts: 164
Registered: ‎04-29-2011
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?

You should consult with a real estate attorney about the availability of "specific performance," which forces them to perform. If you go that route, consult also with your attorney about filing a lis pendens on the property, so that they cannot sell the property in the meantime to someone else (it clouds title and no bank will loan and no smart buyer would risk buying, but you cannot file frivolously or if your contract negates it).

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jkb21
Posts: 32
Registered: ‎01-30-2010
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?

Where is your agent in all of this? They should have explained/be explaining what is going on.

 

You should have a copy of your purchse agreement:

 

1) Is there an appraisal contingency? For how many days?

 

2) I s there a loan contingency? For how many days?

 

Once you and the seller have signed the agreement, it is a contract. Neither party can back out beacuse they "want to", unless under very specific circumstances, which should be outlined in your contract.

 

During escrow, you can ask for the moon, but the seller is under no obligation to say "yes" to anything that wasn't already agreed to in the contract. What *can* happen when you do this, though, is that you upset the seller, or make them think you are not serious about buying the property. This is where the agents need to work together to cool everybody off and get the deal done.

 

The sellers cannot back out of the deal and take your deposit. The deposit is (or should be0 being held in escrow, and the escrow agent cannot release the money to the seller without your permission.

 

The only option a seller has during escrow is to serve you with a "Notice to Perform", but this can only occur after you miss a deadline in the contract. Have you missed any deadlines?

 

Bottom line is that you need to talk to your agent, and get him/her to talk to the seller's agent and get this thing calmed down. Then, go make sure your loan cloases and let everyone live happily ever after.

 

 

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buyinghouse
Posts: 5,890
Registered: ‎04-23-2011
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?


Danny_Dao wrote:

Situation: I signed the deal for $500,000. The appraisal is $470,000. I requested the sellers to lower the price by $10,00. Sellers did not want to lower price, and threatened to take my 20% deposit away because the escrow has been opened for more than 17 days already. I then agreed to buy the price as it is in contract. Now, sellers threatened to cancel the deal.

Questions: If buyers back out, buyers lose deposit money after 17 days in escrow. If sellers back out, what options do buyers have?

Thank you so much.

Danny


  Think about it. The laws would be kind of in favor of the seller. Contract was sealed when they accepted your offer. You go through the process, contingencies, escrow, etc. You pay, they give you the property, right?

  Now, appraisal is a way to get out of the deal. Seller can't force you to buy if the appraisal doesn't suppport your offer, I could be wrong, Adam LA can say something in this.

 

   Any independent party would declare both seller and buyer in fault because both failed to list and offer at a realistic market price. But, once the buyer asks for a refund, to lower the price, the seller has the Ace in his sleeves. Again, he may or he many not have legal grounds to force you to perform if the appraisal doesn't support your offer, but once you counter offered you broke the deal, he is not bound to perform based on the original offer. I hope a realtor comes to clarify this.

 

  Now, before anything, did you close contingencies? Were there addendums back and forth or it was just verbally? Words won't hold in court.

Redfin Partner Agent
Adam-la
Posts: 1,914
Registered: ‎03-15-2011
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?

Without knowing anything related to the deal's timing and contingency status it is hard to really give any advice.  

 

Believe it or not, almost all the negotiating power in a property purchase shifts to the buyer once a seller accepts the offer.   Typically, the seller can only cancel the deal if the buyers fail to clear contingencies in a timely manner, do not perform a specific action (deposits, loan applications, etc) or simply fail to close the deal.  

The standard steps require the seller to provide a notice to perform to the buyers.   If the buyers don't meet those steps, the seller can cancel the deal and potentially keep the deposit IF (and only if) they have no remaining contingencies to protect those funds.  

 

At this point, the original poster should be reading their contract, consulting with the realtor/broker that made the offer and figuring out if they want to buy the house or walk away. 

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buyinghouse
Posts: 5,890
Registered: ‎04-23-2011
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?


Adam-la wrote:

Without knowing anything related to the deal's timing and contingency status it is hard to really give any advice.  

 

Believe it or not, almost all the negotiating power in a property purchase shifts to the buyer once a seller accepts the offer.   Typically, the seller can only cancel the deal if the buyers fail to clear contingencies in a timely manner, do not perform a specific action (deposits, loan applications, etc) or simply fail to close the deal.  

The standard steps require the seller to provide a notice to perform to the buyers.   If the buyers don't meet those steps, the seller can cancel the deal and potentially keep the deposit IF (and only if) they have no remaining contingencies to protect those funds.  

 

At this point, the original poster should be reading their contract, consulting with the realtor/broker that made the offer and figuring out if they want to buy the house or walk away. 


Doesn't a counter offer kill the original contract?

Redfin Partner Agent
Adam-la
Posts: 1,914
Registered: ‎03-15-2011
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?

Short answer, no.  A counter offer does not 'kill' the contract.  

 

In this case, they would have submitted either a request for repairs OR an addendum to modify the contract.   The seller has the option to say no to an amendment or request but the buyer still retains the right to conclude the contract at the original terms. 

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MelissaO
Posts: 2
Registered: ‎12-13-2010
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?

Yes, where is your real estate agent?  

I hope you are represented by a buyers agent and not the seller's agent.

Best get some legal advice from a good real estate attorney.

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buyinghouse
Posts: 5,890
Registered: ‎04-23-2011
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Re: What options buyers have if sellers back out of a deal after in escrow for more than 17 days?


Adam-la wrote:

Short answer, no.  A counter offer does not 'kill' the contract.  

 

In this case, they would have submitted either a request for repairs OR an addendum to modify the contract.   The seller has the option to say no to an amendment or request but the buyer still retains the right to conclude the contract at the original terms. 


  You made my questions easier. Does the addendum to modify the price is the same as a counteroffer from the seller?  What I am trying to find out is if the addendum has the same effect of the counteroffer by the seller, it allows the buyer to get off the deal, thus, addendum to change price allows the seller to get off the deal even though he can force the buyer to pay full price?

   Thanks!