Thread
jd22
Junior Member
Registered: Jun 2001
Location:
Posts: 10
cancellation help
I apologize in advance for the long message, but I'd really appreciate some advice here.
We were purchasing a home in California. We had a loan contingency that was never lifted, and we couldn't meet the conditions of the loan, so we didn't get the loan. Also, we did not have a contingency on the sale of the home we currently own.
The seller decided to cancel escrow and sent us the instructions, but the instructions released the deposit to them. They say they were the subject of fraud because we could've sold our home earlier to get the loan, and they want to recover some of their losses by keeping the deposit.
Now we find out that they accepted another offer and have closed escrow with the new buyers while our purchase agreement is still open. Is this legal?
It seems to me that they don't have any right to our deposit because of the loan cintingency and the fact that the purchase was not contingent on us selling our home. Also, it doesn't seem right that they can have two open escrows at the same time and close one while the other has not been cancelled. Furthermore, if we were to secure a loan, wouldn't we be entitled to the property because we were in escrow first?
Do we have any recourse here? I expect that we are entitled to get our deposit back, but can we get anything else?
08-14-2001 07:37 AM
HomeGuru
Senior Member
Registered: May 2000
Location: Catatonic State
Posts: 13788
Re: cancellation help
quote:
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Originally posted by jd22
I apologize in advance for the long message, but I'd really appreciate some advice here.
We were purchasing a home in California. We had a loan contingency that was never lifted, and we couldn't meet the conditions of the loan, so we didn't get the loan.
**My response: then it's no deal.
*******************
Also, we did not have a contingency on the sale of the home we currently own.
**My response: has no bearing on the deal.
*********************
The seller decided to cancel escrow and sent us the instructions, but the instructions released the deposit to them. They say they were the subject of fraud because we could've sold our home earlier to get the loan, and they want to recover some of their losses by keeping the deposit.
**My response: the deposit can only be released upon mutual agreement of Buyer and Seller.
***********************
Now we find out that they accepted another offer and have closed escrow with the new buyers while our purchase agreement is still open. Is this legal?
**My response: it is possible and it is legal provided your contract ws terminated.
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It seems to me that they don't have any right to our deposit because of the loan cintingency and the fact that the purchase was not contingent on us selling our home. Also, it doesn't seem right that they can have two open escrows at the same time and close one while the other has not been cancelled.
**My response: you are correct in that you are entitled to your earnest money back.
*************************
Furthermore, if we were to secure a loan, wouldn't we be entitled to the property because we were in escrow first?
**My response: moot point since you could not get financing by the required date stated in the contract.
*************************
Do we have any recourse here? I expect that we are entitled to get our deposit back, but can we get anything else?
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My response: Concentrate on getting your full deposit back less applicable escrow and title fees.
You are not entitled to anything else.
08-14-2001 06:18 PM
jd22
Junior Member
Registered: Jun 2001
Location:
Posts: 10
Thanks, Home Guru. One final question:
Is our contract still valid even though we are past the original closing date? In other words, is the purchase agreement still in effect until it is cancelled by mutual agreement of both parties?
08-15-2001 06:37 AM
HomeGuru
Senior Member
Registered: May 2000
Location: Catatonic State
Posts: 13788
No, your contract is terminated and null and void due to the financing contingency not met and then due to passage of time. It is an uneforeceable contract, so pass Go, collect your earnest money and find a another home to buy.
Hint: make sure you get prequalified first, from a mortgage broker.
** Here is the (Thread) question and answers which fit my senario.
Thank you for your quick reply.