But, while you have an accepted offer and are within escrow, and you want to cancel, here is how it could play out.
We Found you the perfect home
We found you the perfect home. Or at least the most perfect in your budget 🙂
We wrote the offer, negotiated in your behalf and your offer was accepted. Most likely after a series of offers and counter offers, depending on the additional buyer drive in that specific community.
Escrow is opened, the next business day after the purchase agreement is executed by all parties.
The Deposit Check is submitted and cashed
You wire the funds for the EMD, earnest money deposit, or drop it off to escrow for your negotiated amount.
The funds are made real and you are on your way to being a home, condo or a townhome owner.
Inspection timeframes start
Now start your inspection time frames. You have “whatever time” was negotiated by the same contract that had been executed and which was your signal to open escrow.
It may be that the “timeframes” were not shortened nor extended and you have 17 days to complete all inspection and remove contingencies. When you remove all “Contingencies”, and cancel thereafter, you lose your deposit.
This is an example of a “contractually based” hard line stance. This is Enforced by the real estate Seller, typically by their agent’s advice.
Is this “always” the case with a deposit?
Can this sometimes not be true? Can you cancel escrow, because of some issue or changing your mind, after you remove your contingencies and still get back your deposit? Sure, it happens, but not often. BTW – It’s up to the seller. It can be up to the courts if you want to persist!
How about cancelling escrow before you sign the contingency removal form?
Escrow charges – watch out when cancelling
You should be okay to do so and to get your deposit returned. However, maybe escrow considers their work, to that point, to be worth something. They may attempt to get you to give up some of it for “work completed” on the file.
It could be that Home Owners Association documents had been ordered, then you cancelled. It maybe that someone on the other side of the transaction will attempt to get those “funds” held from the return of your full deposit.
What if you want to cancel escrow before you remove your contingencies? Could it be the case the seller refuses to release your deposit and try to keep it? Sure, this would then have to go to the Broker Level at each company representing you and the seller. It, most likely, would work out that you will be in the right and the seller in the wrong. Don’t forget though, anyone can sue anyone for anything.
What if you find out something you cannot live with during the inspection time frames? You should have no problem placing your cancellation in writing and getting back your full deposit.
What if you remove some of the contingencies but not all? Then if you cancel because of one you chose not to remove, you should be golden.
What is you found an neighbor that was on the megan’s law computer? During your inspection timeframes you should be good to cancel to get your deposit back.
Can the seller refuse even if you are right?
What if the seller refuses, and by contract, they should be refunding me my deposit?
If they are not doing what they should be doing. You can hire an attorney and sue them. The issue for the seller is they cannot put the property back into another transaction until your situation has been judged and remedied by the powers that be (the court system).
Cancelling a real estate transaction can be tricky. That is why you should only get the best advice from a Trusted and Expert source of real estate knowledge.
I’m Connor MacIvor with RE/MAX of Santa Clarita. Don’t be conned into the “if you cancel you won’t get your deposit back spin”, perpetrated by some agents. Some are only saying it, not because you will, but because they are out for the commission and not you!