Legal Question in Real Estate Law in California
We are selling a home in California. Between 24 and 48 hours after entering escrow, the buyer called their agent stating they changed their mind and requested the escrow fund be refunded. Our agent is asking us to sign a "Cancellation of Contract, Release of Deposit And Joint Escrow" form. The reason given was "Buyers decided not to move forward." No contingencies exist besides the standard inspection report and loan being acquired for less than X% interest rate. Do we, the sellers, have to return the funds?
3 Answers from Attorneys
You can keep a reasonable amount.
You don't have to return the deposit and can sue the buyer for breach of contract, looking to the deposit as a portion of your damages.
You don't HAVE to do anything. However, the reality in CA is that buyers can generally get out of deals without penalty, no matter how unfair you may think that is. Also, you can't re-list or sell the property to others unless and until escrow is cancelled. Your agent should be advising you of all your options, including negotiating a small payment to you from the deposit, sufficient to cover any of your actual out of pocket costs.
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