Legal Question in Real Estate Law in California

Re: Escrow on hold

Your question is difficult to answer in a brief and straightforward way because you did not supply some important deals.

The first missing detail is the legal relationship of the "total stranger" to you. Are the three of you co-owners? How did this happen? If not, why is his signature necessary? What document(s) must he sign?

The next missing detail is whether you presently have the RE lawyer, and if so, why he or she isn't answering this question. If not, why don't you just go out and hire the lawyer? (Possibly you are considering retaining someone through LawGuru, of course -- if so, choose someone who practices in the county where the condo is located, it'll be more efficient and economical).

"Go ahead with escrow" could have more than one meaning. It is usual to OPEN (initiate) an escrow before all the papers are signed. Some escow holders won't open escrow until the parties are "in contract," i.e. all the sellers and all the buyers have signed a purchase agreement, but I know of instances where escrow is opened with less than all the principals' signatures. In any case, escrow won't close until everything is signed.

As to loan approval, the term "approval" can mean any number of things, all the way from "We think you could be pre-qualified" to "The funds are being wired to escrow as we speak." Lenders also have differing policies, but I believe most lenders would "approve" a loan in the usual sense with obtaining a third co-seller's signature at or before close of escrow as a condition of funding.

I truly don't understand what you are asking in your final question. If the third signer is a co-owner, closing escrow without his signature on the deed(s) would not convey his interest, and the buyers would end up owning, say, a 2/3 interest in the property, but as a practical matter, this just isn't going to happen. The buyers (and their lender) will insist that all co-owners participate in the transactions and execute all necessary documents to convey full title.