Legal Question in Real Estate Law in California

Re: escrow good faith deposit

Maybe, if you still have open contingencies. I would need to see the agreements.

Re: escrow good faith deposit

Do you have a buyer's agent? If so, I'd start out by asking him/her these questions. I know agents aren't supposed to practice law, but the things you're asking about are, at this stage, matters that good agents can counsel their clients about.

Three parties have legal duties to disclose probblems and defects: the seller, the seller's agent, and the buyer's agent. The duties of each differ. The seller's duty is to disclose what he knows about. The seller's agent has a statutory duty to make a visual inspection and disclose the results to the buyer (Civil Code section 2079 through 2079.24). The buyer's agent has a duty to use his/her experience and training to serve his/her client's interests capably. These brief statements should not be taken to cover the subject exhaustively, of course.

A seller doesn't have to disclose what he/she doesn't know or suspect. Generally, a resident seller is expected to know and disclose much more that an absentee owner/seller. Agents' duties to inspect and disclose are also somewhat limited; they aren't expected to be home inspection experts, nor to know about hidden defects. Some disclosures are adequately covered by giving the buyer a disclosure form or checking a box on a multiple-choice form.

With respect to lawsuits and costs, look at your contract and see if buyer and seller initialed the boxes agreeing to mediation and arbitration. If so, this may be a less costly alternative for the parties. Also, look for an attorney-fee clause. Usually, the losing party is obligated to reimburse the winning party by such a clause. Otherwise, each party pays his/her own attorney whatever the outcome.

Whether you can back out or not without being liable for damages is something I can't answer. It would depend on whether the defects are material or minor and routine - no house is perfect, not even a new one - and whether there was a failure to disclose and the failure was material, etc.

A dispute over $3,900 should be negotiated, or to mediation by a neutral at most, and not go to arbitration or to court. This is too minor, and would raise a suspicion in the mediator, arbitrator or judge that the $3,900 in undisclosed problems is a cover-up for a change of mind caused by other factors.