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Previous escrow was cancelled by seller but not by the buyer

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Frank valen

Guest
I am currently in escrow for a home which previously was in escrow with another buyer. What happen was that the seller gave the previous buyer 20 days to show proof that he was approved for the loan - buyer did not reply within the 20 days and the seller signed the cancellation of escrow but the buyer is not willing to sign. The buyer also tried to have the seller lower the price of the home so that he can qualify - I am now in escrow for this home but I am concern that this previous buyer refuses to sign the cancellation of ecrow form. Am I in the right to open escrow or does the cancellation form needs to be signed / and if my escrow closes and I become the legal owner is there any legal remedies that this ex-buyer can have towards me? How is it that this ex-buyer can stop me from buying this home? This house located in California is not going for very much and I think that legal proceedings will cost the ex-buyer a big chunk of change. Thank you for your help
 


HomeGuru

Senior Member
Your offer is subject to termination of the first offer. If the Buyer refuses to sign agreeing to termination of the conract and escrow, you have to wait until the issues are settled.
 
F

Frank valen

Guest
Cancellation of Escrow

Thank you for your advise but I am a bit confused - I researched your db of FAQ and on a question posted Jun 2001 by jd22 - I thought I had found my answer (same senario). Can you please clerify since I am currently in Escrow. If your reply is correct to my questions - what would happen or could happen if I close escrow.

Why would you give a different answer to two senarios which are identically the same. The first buyer did not meet the 20 day requirement of the escrow in which he had to submit loan approval docs therefore the buyer signed and submitted a escrow cancellation form. I really appreciate your advice on this problem. :confused: :confused:
 

HomeGuru

Senior Member
Re: Cancellation of Escrow

Frank valen said:
Thank you for your advise but I am a bit confused - I researched your db of FAQ and on a question posted Jun 2001 by jd22 - I thought I had found my answer (same senario). Can you please clerify since I am currently in Escrow. If your reply is correct to my questions - what would happen or could happen if I close escrow.

Why would you give a different answer to two senarios which are identically the same. The first buyer did not meet the 20 day requirement of the escrow in which he had to submit loan approval docs therefore the buyer signed and submitted a escrow cancellation form. I really appreciate your advice on this problem. :confused: :confused:
My response: I have no idea what thread you are referring to. Please locate it and cut and paste it on this thread.

Thank you.
 
F

Frank valen

Guest
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:
--------------------------------------------------------------------------------
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.

************************
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?
--------------------------------------------------------------------------------



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.
 
F

Frank valen

Guest
I don't see how the two are different - buyer # 1 did not comply with the instructions of escrow in which buyer had to show proof that he had secure a loan for the home within 20 days- that expired and the seller now says it's no deal - buyer #1 refuses to sign cancellation forms and now has gone past escrow closing date. My only worry is that my escrow was open during his escrow but I will not be closing escrow until 10 days after buyer #1's escrow should have closed.:confused:
 

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