Legal Question in Real Estate Law in California

Re: buyer backing out after loan doc signed ??

Ordinarily the purchase and sale agreement has the buyer depositing 3% of the purchase price in escrow. Usually there would be an initial deposit, and then upon loan approval the deposit is increased to the 3% mark. If all contingencies have been removed (loan approval, inspections, transfer disclosure statement approved, etc), then if the buyer cancels the contract, you are entitled to keep the 3%. If the buyer is claiming they are entitled to the 3% back because of something not disclosed, then you can choose to not release the monies in escrow. It sits in escrow until you have resolvd the matter with them. Some escrow instructions give authority to the title company to release the funds to you without the buyer's consent, but my guess is the title company will do nothing without both you and the buyer signing instructions on what to do with the 3%. It's hard to sue for specific performance to make the buyer buy the property. It's much easier just to keep the 3%.

I am an attorney and real estate broker. If you need assistance with protecting your rights in this matter, I would be happy to help. I am located in Marin and Sonoma counties, if that is close to your location. Since you have a RE broker, this is not a solitication for a listing agreement.

Regards,

Re: buyer backing out after loan doc signed ??

I wouldn't sign the cancellation of escrow on that. You may contact me.