Can I relist and sale my home?

Question

Hello does anyone here know if I can relist and sale my home if my previous buyer did not perform? They signed off on all contingencies. They are not releasing the EMD or signing the cancellation. My ex realtor says CARS attorney says no and I spoke with a real estate attorney who told me yes. I'm so confused. I want to relist and sell now and go to small claims when America opens back up. The home is in California.

Peter Walther · Answer

Underwriting the issuance of a title policy is always a judgment call.  I tend to be more conservative than some others but I guess its based on my experiences.  I've found that no matter how clear the facts appear to be to me, someone can disagree.  However, Moni has posted that the matter is in Small Claims Court.  If I had a chance to read the filings I very well might change my mind.

Moni Pierre · Answer

At this point the previous contract is expired and EMD is in limbo until small claims case judge rules. I will be relisting and selling due to the dispute is the earnest money not the purchase contract. The contract is expired. Buyers no longer can get a loan. This will be reflected in the listing so potential buyers are notified of the situation.

Tom Gimer · Answer

@Peter Walther Had this exact scenario occur within the past 2 months and the underwriter gave the answer I provided above. Buyer failed to close in a time of the essence situation but kept working on getting funds, making promises, even stating multiple times that they had initiated the wire. Nothing arrived of course.

I always prefer to see a mutual release but with a buyer clearly in breach the title insurer (a top 3 national underwriter) said "no release required". Of course it could be a totally different business decision to make for the title company and parties if the breach was not so clear or the contract terms were ambiguous.

Peter Walther · Answer

Are you saying in your post the escrow agent will not release the earnest money deposit to you or to the buyer?  If not to you is the buyer making demand on it and you won't agree to its release?  Was the buyer getting financing and now can't get a loan because of a job loss?  I'd be surprised if an escrow agent and/or title agent would be willing to close and issue title insurance on a second contract with knowledge of an unreleased prior contract.  The possibility of a lawsuit involving the property is way too high unless the first buyer releases the contract even with a provision you two will fight of the EMD.

Tom Gimer · Answer

@Russell Brazil  From a title insurance perspective, there would not be a need for a release... the buyer failed to perform. That said it makes sense to give the buyer notice and a final opportunity to tender funds or you can end up in the middle of a lawsuit.

Russell Brazil · Answer

Though not in California, maybe @Tom Gimer will chime in in regards to possible title issues.  Ive known some title attorneys here locally who will not issue a title insurance policy if there is an unreleased deposit, and I know others who do. Tom, which way do you roll on this issue?

Moni Pierre · Answer

Thanks everyone. I will be relisting. My new agent has had this issue before. Will update you all when sale is complete.

Moni Pierre · Answer

I had an agent in this deal. The purchase agreement expired. 2 extension addendums where given. They signed off on all contingencies. Sent NBP. Sent DME. These where ignored by buyers agent. The buyers still continued with pursuing the sale and attempting to get a loan. They eventually signed closing docs. Insert pandemic. Then buyer is laid off. Now everything at this point is expired. My listing, My contract with my agent, my extensions for the purchase agreement. I guess I was looking for a straight answer on opening and closing a new escrow since I have one in limbo but it still seems complex. What other details did I not provide that will give more insight?

Wayne Brooks · Answer

@Moni Pierre This should be a simple question for your agent....talk to their broker if you don’t get a clear answer.

Lydia S. · Answer

@Moni Pierre

Forgive me, but I am confused, and maybe it’s because of processes in different states.  You’re saying buyers signed closing docs, and you didn’t?  Why did you not sign the same day and complete the sale?