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What are the circumstances in which the buyer can lose the deposit escrow that they gave the sellers attorney ?
Just FYI, I as a buyer have in good faith given all the documentation requested within a 24 hour period.... ALWAYS. The seller took almost 2 months to get the CO. Also they took 3 weeks to give me a document that was necessary for underwriting. And after we got the docs the underwriting + MCC processing took us another month (we are way beyond our 30 day extension of the closing date).
I am now confused.... If there was no delay whatsoever from me as far as getting docs and paying fees and everything else concerned, why would I lose the deposit ?
Unless the deal is officially cancelled, you shouldn't have any problems.
My closing went totally way off the time frame on my last house. **** happens.
The worst thing that happened was some nasty letters back and forth between parties and some huffing and puffing during personal meetings.
The sure fire way to lose your deposit is to just say, "ah screw it, we've changed our minds and don't want your house". Other than that, it's pretty difficult to lose your deposit due to what is considered normal delays.
From the fragmented information that you provided, it does not sound like you will lose your deposit.
Most contracts have a mortgage contingency. That is, if you cannot get a mortgage within the prescribed time, the sellers can back out, but you are entitled to your deposit back.
You did not say that the sellers are looking to get out. In today's market, they are probably willing to wait to close if it looks like your mortgage will go through.
Thanks for your replies Elke, hotkarl, Tom and Riddle.
Our on or about date was (yes !) Sept 15th.
We had a CO situation going on.... the sellers cleared the CO on Oct 19th. There was a doc I had requested from the seller in the last week of Sept. After another reminder for the doc, they delivered it to me on the 20th Oct.
So it then went into underwriting again (whats up with this underwriting thing, I think I went thru' it 3 times already !!) So now we got the MCC clearance and hopefully we should close by next week.
I think everything is in place but my attorney (of all people) was saying that the sellers are threatening to keep the deposit. No notices have been exchanged yet, but I just felt flabbergasted at the audacity of the sellers.
Back in Sept, when they were in the CO process, I did ask my attorney to let the sellers know to hurry up and that if I cannot close by Nov 30 then I'm backing out of the deal as I will not get the 1st time buyers tax credit, unless they reduce the price by 8k. But thats history now as the program is extended, so unless this is a poor attempt to get even with me, I feel this is childish and ridiculous !!
I am ok with they asking to back out, but backing out and keeping the deposit is unacceptable. Again, my turaround time for any requested doc was 24 hours (at the max !), and I was under the impression that I'll be in trouble only if there is a undue delay on my part as to paying fees or getting the docs, in which case they might say that I did not co-operate with the mortgage process.
Were you told that your deposit would be actually forfeited? Delays are common in real estate transactions - as long as you close at some point you should be fine. Check with YOUR attorney.
On the flip side, if there was anything inappropriate with the conduct or handling of an escrow transaction, the Lawyers Fund is an industry group that may reimburse for lost escrows due to mishandling of escrow deposits. You would have to supply a fair amount of documentation and it might take awhile. I believe there is a cap on amounts recoverable.
You need to establish clearer communication with them. Selling and buying a house is stressful for everyone and you're hearing things 3rd or 4th hand, not directly. I'm not an attorney, but from your post it seems as if they think YOU will be backing out if not closed by 11/30, not that they were backing out. In this market offers may come - but true ready willing able buyers are hard to come by, so who would want to lose a buyer? In your contract you would have had to probably had that close by date language inserted by your attorney in order to get the deposit returned after that date.
Hi iloveli,
Well contact said after Oct anyone of us can withdraw from the contract, but obviously I waited because they were getting a CO. So other than not closing by Nov 30, there was no indication from my side to back out. And once that was extended, it was assumed that I'll close on the house unless something major happens, like a lose my job or things like that.
I'd say if you do want the house, putting aside the aggravation - ask them to provide their most up to date time table for you to get to a closing. That is a reasonable request. Otherwise, if you want out, you'll need to have your attorney be more aggressive in setting protections for you - that is their job, which sometimes you need to point out. The seller's attorney could care less about your end in this, so don't expect it.
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