Here is a hum dinger of a question...
successfully negotiated a triple lien and brought it in at a great price to an all cash buyer...buyer screws around and submits a crap addendum three days prior to closing drops the price by 100,000, seller signs on it, bank rejects...
Listing agent and buyers rep start the addendum games, and not one single addendum sticks, there are never any notices to perform involved etc.
Long story short...buyer delayed the closing until the first lien said, they have had it...the first sends a note stating that we can only keep a file open for 90 days, and we are removing this case from the active side because 90 days have elapsed. Either re-submit or place the house back up for sale.
Seller agrees to allow buyer to retain all of their deposit, buyer refuses to sign cancellation instructions...and instructs buyers lawyer to callI have never seen this one...any one else ever heard of this?
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I am a CA Broker and the advice given by Thom Colby is correct.
The bigger question is what is the buyer trying to accomplish. I am sure the seller is just glad to be there for more time for free.
I don't understand how a buyer can drop the price simply by giving an addendum, and why on earth would the seller sign off on something like that? That would never happen here. If that happened here, I'd ignore the addendum and go to settlement and if the buyer didn't show up, the deal is dead.
A buyer can do that if the contingency period was not removed in writing...hence the three days prior to the close ding of 100 grand...dont even ask as to why the sellers rep was not all over the buyers with Notices to perform or anything prior to getting the contingencies removed...I have no idea, I just negotiated the case out...and presented it pursuant to the listing agents request.
I think alot of the problem here is that the listing agent failed to cover the A of the seller, by not using the CAR NTP...that just kept the door open on the contingency period...however the ultimate killer of this deal was the lender and their 90 days to close. Once that is exhausted the deal is done and finito...
Like I said, it just boggles the mind as to why an atty is trying to squeeze the servicer for whatever, they certainly can not make the seller sell, or the servicer accept.
Its really kinda funny to me, because I just never fathomed that a buyer would deliberately refuse to sign cancel instructions, when they have the option to get their full EMD back.
Real Estate in CA is so weird, different. LOL.
The contract will outline remedies for default. If the contract is no longer valid then the fact that the buyer won't sign a release really has no baring on anything. He can't force the seller to sell and certainly not when the lenders don't agree to the short sale under current terms and conditions.
But of course I am NOT an attorney and this is just my opinion.
I think your right! Thank you Brian!! However in California Escrow has to have signed cancellation instructions before the escrow can officially flop...without both parties signing off on the cancellation instructions the asset stays in limbo, the seller cant enter escrow again with a new buyer...while this one is pending.
Never have I seen a case where the buyer refuses to sign cancel docs, when the seller has agreed to give back all of the deposit, even though seller has perfect grounds to keep it all....Only in California is all I can say!!
In Florida they also have to have a release to release the deposit. However that has nothing to do with whether or not a seller can accept another contract and sell the property. An escrow dispute is a separate issue from a contract dispute. This is often misunderstood. Even by escrow companies.
I can't imagine CA would be any different. I would seek clarity on this issue. Don't believe everything you hear.
If this were true then buyers could tie up a property for years over a deposit dispute. The only way to tie up a property is a valid contract or a court order. not an escrow dispute.
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In California...last I checked (I have not checked in a while)... there are two ways, there was the Inter-pleader way, which had the EMD adjudicated by the courts in the event the buyer and seller could not agree, or after two years of no action the escrow office can turn it over to the state.
Either way, it ties the property down for a while, the only thing missing is a lis pendens...that would actually tie the property down until final judicial adjudication.
I really dont think that this will ever go that far...but none the less, it is a possible reality. In the event that current participant of escrow (buyer) should file a suit against the seller for whatever reason, that would add a cloud to title (lis pendens) which would kill a clean title transfer until final judicial adjudication.
Im not a lawyer, and cant validate this, however...A great majority of my clients of mine are lawyers and seem to be echoing this statement.
I will have to check and make sure that this is correct.
Either way, again, I have never heard of an buyer refusing to sign...so I think this is new territory.
The short sale is contingent on approval of the lienholders. The lienholder has revoked their approval so therefore the contingency takes over. That deal is dead. The Escrow company legal team should be able to help you out.
Good luck,
Thom Colby
Newport Beach & Palm Desert CA
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