Legal Question in Real Estate Law in California

Residential purchase Agreement and Escrow Instructions and counter offer #1

We had a buyer for our property, deposit in agents hand. After our counter offer, which they agreed to through agent by phone ( counter off states agreement by phone and our agent was just getting a signed version to start escrow)and just prior to sending to escrow the buyer stated they changed their mind based on fight with wife and per in-laws advice not to buy. According to our agent per section 14 B of the agreement, the buyer has 17 days to change their minds. Is this true or is that only if there is a problem with reports etc. #16 on the agreement/Liquidated Damages states that buyer may lose deposit if buyer defaults. Now they are trying to get us to sign a form called Cancellation of Contract, Release of Deposit and Joint Escrow Instructions. We were told this signature is needed for paperwork purposes only. Are we not entitled to the deposit because the buyer pulled out or does the 17 days apply in this instance?

Thank you.


Asked on 5/03/06, 12:32 pm

2 Answers from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: Residential purchase Agreement and Escrow Instructions and counter offer #1

A. An actual signature is required for a real estate contract to be valid.

B. The contract is written to allow buyers an "our", whether real or not. All they have to do is disapprove on any report or disclosure, and they can back out ... even if the reason seems trivial.

Bottom line is that you are not entitled to keep the deposit, there probably wasn't even a valid contract, and you are better off finding out now than in 17 days with no one looking at your house because it wasn't on the market.

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Answered on 5/03/06, 12:47 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Residential purchase Agreement and Escrow Instructions and counter offer #1

Except in rare circumstances, not present here, any contract to convey an interest in real property must be in writing and signed by the party against whom enforcement is sought.

Further, an oral offer may be withdrawn orally any time before it is accepted.

Based upon the facts given, I'd say you're not in contract, these "buyers" have no obligation to you, and you must return the deposit.

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Answered on 5/03/06, 5:43 pm


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