Gracefully "weaseling Out" Of A Contract
Let me start by saying, this is obviously not my preference, but I've not been successful at assigning my contract. I had an investor talk me into going ahead on a deal I had kind of decided I wouldn't pursue any further. He said he was very, very interested. Well, long story short, he's changed his mind, I have a contract to buy, and haven't been able to find another investor who's interested. My contract expires very soon and I did have a clause that said "subject to approval of my partners", so I have an out, but I don't know how to exercise it gracefully. Any advice? Also, am I now responsible for paying the title company who has opened title on the house? :cry:
So who negotiated the deal, prepared the docs, etc. If there is a broker involved the easy way is to have your attny send the broker a letter saying that the partner approval contingency has not been met and you have opted to allow the contract to expire.
No, no brokers involved.
CRAZYFNMAMA --
Did you use a prepared real estate contract or did you just hand write the purchase contract?
Usually, there is a "time period" that you as a buyer must do all your "continguencies" which would be the "approval of your partner". This is usually lumped into the inspections, approval of documents, property compliance verification, etc which preprinted is 14 to 21 days depending on which preprinted document or what you wrote in.
Meaning ... that you as a buyer should not be allowed to be able to "back out" or "cancel the escrow" on the day of close and be entitled to your deposit back because now "your partner does not approve" clause.
Title companies usually do not charge for a cancellation of escrow and do not charge for any escrow fees (at least here in California ... ask your title company in Texas).
Just have the title company prepare the "cancellation of escrow" and state for your deposit check funds to be returned to the "buyer". Both you and the seller must mutually agree and sign the cancel form and return to the title company.
Another option ... if the seller strongly objects to the return of the deposit to you and wants to keep it . Did you write the check payable to the title comany? If so ... then you can walk into the title company and PERSONALLY DEMAND THE RETURN of your money and the title company MUST RETURN the money to you.
Cheryl Lopez[ Edited by cheryllopez on Date 06/29/2004 ]
Thank you. No, I don't expect to get any of my money back. I feel like a [insert explative here] for backing out of the deal. It's not the seller's fault. He can keep the money.
what were the numbers on that house?
Why couldn't you get rid of it in time?
ARV? Repair Est? Asking price? What you had it on contract for?
JB
[addsig]
You feel bad because the Seller did nothing wrong and is going to lose the sale. So what? You have done nothing wrong either. You thought you had a deal and it did not work out.
The only gracefull thing to do is as soon as you know you can't close tell the Seller. Invoke your contingency, get your money back and both you and the Seller can move on down the road.
Quote:
On 2004-06-29 21:02, crazyfnmama wrote:
Let me start by saying, this is obviously not my preference, but I've not been successful at assigning my contract. I had an investor talk me into going ahead on a deal I had kind of decided I wouldn't pursue any further. He said he was very, very interested. Well, long story short, he's changed his mind, I have a contract to buy, and haven't been able to find another investor who's interested. My contract expires very soon and I did have a clause that said "subject to approval of my partners", so I have an out, but I don't know how to exercise it gracefully. Any advice? Also, am I now responsible for paying the title company who has opened title on the house? :cry:
*Did you say in your contract that sale was subject to your partner's approval within a certain amount of time or did you just leave that open? In any event, you need to give your "written" notice of cancellation to the seller or the saller's agent or attorney. The cancellation agreement must be signed by all parties. Once that is accomplished, then you would call escrow and instruct them to draw up their Cancellation Instructions. At that time they will tell you if there is a charge for the title work that they have done. All parties must sign the Cancellation of Escrow. Without signature on that document, the funds cannot be released to anyone. Whoever said that the escrow company MUST release funds upon demand is DEAD WRONG!
Madam Has it right to the Tee.
Don't be so hard on yourself. You did the smart thing get the property under contract and then hustle to pull the deal off. Not all deals go through that is just part of the game. By the way most deals that don't work are because the seller wants to much.
Good luck and keep hustling.
TO: MADAM REAL ESTATE --
I emailed this response and will post it also here for everyone.
I am sorry ... BUT you are "dead wrong".
At least here in California ... there is a escrow civil code law that DOES APPLY and has applied during my career.
YES ... when the check is written to the title company and the person who wrote the check walks into the title company and PERSONALLY DEMANDS the funds be returned back to the person who wrote the check ... the title company MUST return the funds.
IT HAPPENED TO ME !! I WAS SHOCKED & SURPRISED !! DID MY HOME WORK AND CHECK IT OUT !!
At that time I was a real estate broker for about 5 years.
It was a title company in Placer County that did it and I had used them alot and they felt bad and explained and showed me the reason why they were required by this civil code law to return the money back to the buyer.
Cheryl Lopez, Broker
49er Real Estate
Now is business for 14 years
CANCELLING ESCROW --
Here is California ... escrow companies will take the order to cancel and draw up "cancellation of escrow" without having prior both signatures. Just yesterday a title company took the order from a phone call from the listing agent's office to cancel.
The title company prepares the form and sends this form to buyer, seller and both brokers involved. We all have to sign it before the escrow is cancelled. Prior documents from real estate offices IS NOT required ! (Maybe Oregon is different.)
BUT the title company will require both signatures from buyer and seller and brokers to finalize the cancelled escrow.
I already mentioned twice on this posting of my personaly & professional experience with a buyer demanding and getting his funds back.
Cheryl Lopez
In Oregon and Washington the only way to get the earnest money back is through interpleader. This is basically the title company depositing it in court and letting the buyer and seller battle it out. This applies 100%, no matter what the contract says unless both the buyer and seller sign a release.
johnbriscoe,
That's also the way it works in PA. After 30 days' notice to the parties, the RE licensee holding escrowed funds must interplead the funds if there is a dispute between buyer and seller as to who is entitled to the funds.
Nancy
Quote:
On 2004-06-30 18:43, cheryllopez wrote:
CANCELLING ESCROW --
Here is California ... escrow companies will take the order to cancel and draw up "cancellation of escrow" without having prior both signatures. Just yesterday a title company took the order from a phone call from the listing agent's office to cancel.
The title company prepares the form and sends this form to buyer, seller and both brokers involved. We all have to sign it before the escrow is cancelled. Prior documents from real estate offices IS NOT required ! (Maybe Oregon is different.)
BUT the title company will require both signatures from buyer and seller and brokers to finalize the cancelled escrow.
I already mentioned twice on this posting of my personaly & professional experience with a buyer demanding and getting his funds back.
Cheryl Lopez
I was a broker and also an escrow officer in Calif for 10+ years back in the 80s and I don't remember anyone being able to release funds to a buyer upon demand. Escrow Cancellation Instructions were always prepared in order to tell escrow who to give the money to. If there was a breach of contract on the part of the buyer and the seller wanted the earnest money, but the escrow company had already released it to the buyer, who do you think would be sued? Talk about liability!
I think you guys are agreeing and don't realize it.
TO EVERYONE --
I contacted to title companies here in California (Placer County) Old Republic talked to Bud Richardson Owner and Placer Title Janet Virgil Manager ... and
BOTH have agreed with me and are fully aware of the TITLE CIVIL CODE governing title companies on that BUYERS CAN "DEMAND" RETURN TO THE FUNDS (if the check was written payble the title company). The key word is "demand" according to Janet at Placer Ttile.
BOTH Bud and Janet will hunt down the civil code number and I WILL POST IT HERE for everyone to obtain the number and an brief quote of that code.
This will only obtan to California civil code.
I originally brought this fact up to the original poster from Texas to check on this policy if the seller refused to return the money to you.
WILL KEEP YOU POSTED ON THAT CIVIL CODE NUMBER.
Cheryl Lopez, Broker
What is the point of escrow, if the buyer can "demand" their money be returned?
Here in GA an independent third party, the escrow agent (broker, attorney, etc.) releases escrow money pursuant to the escrow agreement. In the event of a dispute, they will not release any money untill the dispute is resolved. Most escrow agents will require all parties involved to sign documents ok'ing any distributions.
Sounds to me that in CA buyers never have any earnest money at risk because they can "demand" it back. I love CA, but alot about CA does not make sense to me.
TO EVERYONE --
I will post the civil code numbers related to the "demand". Both title owner and manager gone for the holiday.
PLEASE EVERYONE ... this has been a very well kept secret civil code that has been around for YEARS !!
I unfortunately had to become aware of it myself a few years ago. Obviously, not all CALIFORNIA agents and brokers are aware. This only applies WHEN the check is made payable to the TITLE COMPANY AND the BUYER is aware of what to do. That is to personally go to the title company and DEMAND the deposit back.
Title companies will not volunteer this info. But the buyer I was working with was told about this procedure from a LEGAL AID ATTORNEY. I guess that was a sharp attorney.
ONE way to stop that would be have the deposit check MADE payable to the REAL ESTATE COMPANY and then endorsed over to the title company.
CALIFORNIA is not all bad ... in fact most of our regulations I feel are the best over other states ... and I do business in other states.
Cheryl Lopez, Broker