Losing deposit when canceling escrow
Hi,
I have a question as Rookie. I want to cancel escrow due to inspection contingency on the last min. Buyer didn’t reply to me or release deposit. Now they are on escrow with different buyer.
I wonder if they can be on 2 different escrows like that??
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@Vu Truong
If you have an inspection contingency then you should be able to walk and get your escrow back
Who holds the escrow? Usually you have a title company hold it? Is that not the case ?
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#1 Foreclosures Contributor
- Real Estate Professional
- West Palm Beach, FL
@Vu Truong As long as you properly cancelled the contract Within your contingency period, you are due your EM back. That wouldn’t necessarily prevent the seller from going under contract/escrow with another buyer….since there is no longer any contractual obligations to sell to you, the release of the EM is a separate issue. Follow the dispute steps hopefully outlined in your contract.
The bottom line is, if the seller is uncooperative, you’ll likely have file suit to get your EM back.
as long as you sent the termination citing the reason as the inspection contingency before the deadline you should be good...They can not have escrow open with two people at once. (well they can if they dont follow the rules)
My question is who is holding this deposit? And was it an actual deposit or downpayment? I know some off market seller's take downpayments directly to themselves so they can retain all control.
@Vu Truong - are you the buyer or the seller in this transaction? Your message says
”Buyer didn’t reply to me or release deposit.”
@Vu Truong
Once an argument starts over earnest money, it's best to just reach out to an attorney to handle the matter if you really want to get it back.
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@Chris Seveney yes. Escrow company has the deposit but they said seller hasn’t signed so they can’t release deposit to me. And I didn’t know I don’t have my deposit until 2 weeks later. Surprisingly, they are already on escrow with different buyer. I never removed my inspection contingency even though it is over 17 days of period due to back and forth disagreement.
@Patrick Drury do you know what is the approximate cost for that? I ve never gone through it but I am willing to go through it actually. It is a learning experience for me. I kinda set my mind that as I’m in the business long enough, I would have to deal with different disagreements.
@Sergey A. Petrov sorry, typo. I’m a buyer. Seller doesn’t want to release deposit.
@Humberto Marquez. Is it out of the period of inspection contingency but I was dragging long because of disagreement. Escrow/tittle has the deposit but they don’t release because buyer didn’t sign. Somehow buyer is on different escrow as well. I was surprised.
@Vu Truong - if your purchase contract is as crystal clear as it is and you are still within your contingency periods that allow you to cancel and receive your earnest money back, in theory, seller signature is not required. Yes, escrow companies may require one especially if there is a disagreement between the two parties as to what the contract actually says (is there any fuzzy language?) Have you given formal notice of contract termination and a demand for the earnest money refund?
Has escrow told you the seller specifically instructed them not to release? In some cases, escrow will say “hey seller sign this release so we can refund. If you don’t sign or respond otherwise we’ll refund anyways in X days as per the terms of the contract”
I am sure there is more to this than what we are seeing in your brief post. What does your real estate agent say?
Quote from @Vu Truong:
@Humberto Marquez. Is it out of the period of inspection contingency but I was dragging long because of disagreement. Escrow/tittle has the deposit but they don’t release because buyer didn’t sign. Somehow buyer is on different escrow as well. I was surprised.
Wait, you are past the contingency periods???? Buyer didn’t sign again? I am confused on this one…hope others can help untangle.
How long was your inspection window? You said 17 days. In our market we have 10 days to inspect(typically) and then 5 days to go back and forth(unless it was As Is). Has the seller given why they don't want to release? If a deadline was missed or you went past the contingency then you aren't owed it back. I would verify everything was done within the window and you didn't miss any deadlines. From there try to push for them to sign. If you have a buyers agent chat with them and see what they say. If they don't agree try to split it or get an attorney. In my market all parties need to sign in order to release the EMD no matter the circumstance. How much was earnest money?