Buyer's Deposit - Posted by Pam

Posted by Frank Chin on May 19, 2007 at 04:54:11:


There’s several issues here:

  • Is all of what you’re saying here stipulated in the contract.
  • is the escrow held by an “escrow agent”.

Assuming that all of it is in the contract, and a “escrow agent” holds the funds, usually both parties must agree that the funds be returned to the seller before the seller gets issued a check.

I had buyer’s funds that I was entitled to once, and my attorney who’s also the escrow agent advised that he is NOT the arbiter of facts that was in dispute, and both the buyer and seller has to come to an agreement, and he has to receive authorization from both to be able to issue the funds. If not, the parties would have to get a decision from a court, and he will then abide by the decision of the court.

Apparently, it’s not a simple case of the seller calling the ecrow agent saying “xyz happened, so issue me a check”. Because the buyer could also say “xyz didn’t happen, and issue me the check”.

Frank Chin

Buyer’s Deposit - Posted by Pam

Posted by Pam on May 19, 2007 at 24:29:18:

A buyer was “approved” for a loan and left a check as a deposit, placed in escrow. Then the buyer had to do a lot of work, removing out buildings, tearing down things, etc. to meet the buyer’s loan qualification, SO an addendum stating that, due to the amount of work buyer was requiring seller to do and the cost of that work, etc, that the check now became “NON-refundable”. Further, it says that if the buyer defaults, the deposit will be deemed liquidated damages to the seller. So, my question is, IF the day before close of escrow, there was found to be a mistake with the lender and buyer is now trying to find another lender…IF the buyer is unable and the seller has already done all this work originally required by the buyer, would the seller get the “non-refundable” check?

Re: Buyer’s Deposit - Posted by Rich-CA

Posted by Rich-CA on May 19, 2007 at 17:08:31:

Most escrow agreements require both parties to agree to release any funds. There is another factor. Does you contract when escrow must close? I know on mine, there is a close date on the contract and any extension beyond that requires signatures of both parties. Without an extension, earnest money becomes “liquidated damages” but still is not released without a finding from an arbitrator or judge.