With all of the preparation in the world, it cannot compare with real thing of “cancellation”.
We explain to the home seller that there is not much to prevent the home buyer to cancel the transaction, the purchase of the seller’s home, besides the deposit. And the deposit is not up for grabs until the buyer removes their contingencies. (seek legal advice).
The “removing of contingencies” usually happens after 17 days for the inspection related ones and at 21 for the loan related contingencies.
After that and a formal buyer signed “contingency removal” form, then if the home buyer cancels the escrow their deposit, EMD – earnest money deposit, becomes the property of the home seller.
Of course, if they don’t want to let it go then both sides will potentially go to arbitration or attorney up depending on what was agreed to in the original contract and counters.
It’s much harder for a seller to cancel the transaction than a home buyer. The courts view the seller as being “experienced” having bought at least once before and the buyer “not experienced”, at least with the home they are buying.
The home buyer can cancel and retain their deposit all the way to the end if a removal of contingencies form is not executed (signed).
Of course, the seller can deny the home buyer and then the home cannot be sold until the issue is remedied. That would be up to arbitration or the court, depending on what was agreed upon in the originally executed contracts.
What you don’t want to do is let an escrow fall apart for the wrong reasons. The “wrong reasons” are emotional ones. Those where you think that you may have been taken because the home seller did not agree to repair the faulty GFCI outlet in the kitchen the home inspector called out.
That is a $30.00 fix and you have spent over $1,000 to get to this point in escrow, that is not a good reason to cancel the transaction and potentially have your deposit held up in a legal tort. BTW – the $1,000 I referenced is what you’d potentially spend to have the property appraised and inspected. Prices vary depending on square footage and location.
Some sellers look at the home buyers as getting a “good deal”. Especially if the property appraises for less than the seller’s listing price. This happens from time to time when a real estate agent is attempting to gain the listing from other agents being interviewed. Or if the home seller is fixated on a (higher than the market) listing price and if the agent does not have the intestinal fortitude to explain why that’s not a good idea.
Of course, with a lower than agreed to price appraisal, the seller has choices. They can choose to accept that price and move forward. The home seller can counter the home buyer and say they will pay the difference between the appraisal and the price they originally agreed to. Or the home seller can negotiate with the home buyer and they can meet in the middle or some variation thereof.
There are so many things that can go wrong within a real estate transactions. The home sellers and home buyers are just people. As are the real estate agents. Some people take things very personally. Some don’t. You mix two that do and you have a roller coaster of a real estate transaction ahead of both agents.
It’s the agent’s job to keep the sellers and home buyers informed as to what could potentially happen and how to achieve the most positive outcomes between the parties.
OMT – the agent that is working exclusively for the home buyer cannot communicate legally with the home sellers. As is the case with the real estate agent working exclusively for the home seller, they cannot communicate with the home buyer. All information must be relayed from party to party via their real estate agents.
This does a great job keeping the chatter down to a minimum. It’s also intended to lessen the impact of any hostilities that come about via misunderstandings. Most real estate clients don’t see anything wrong with the agent on the sellers’ side directly communicating with the other real estate agent’s client. It’s inappropriate and an ethical violation of the Board of Realtors.
I’m Connor MacIvor and I’m glad to be of great service to you and all your real estate needs. Please let me know when you are ready for my assistance or those who you know that need a top-shelf real estate agent in the Santa Clarita Valley.