Posted by John Merchant on August 07, 2003 at 18:48:12:
I don’t know where you got that idea. What one private escrow company is doing, does not affect your legal right to move on.
However, it would be a mistake to agree to sell to another party without first getting the first deal totally released by buyer #1.
Suggest you just tell buyer #1 NO, you’re NOT
releasing their $3,000…until you find buyer #2. Then you can dicker with #1 and finally offer them something for their release. But if #2 does NOT show, don’t release #1’s money. And for sure don’t release it at all without simultaneously getting their release so they give up all their rights.
On dealing with #2 now, just make sure your P & S agreement with #2 includes language to the effect that there is another deal pending, and #2 deal is subject to #1 NOT closing, and your getting a total release from #1. That way, you won’t be stuck with 2 buyers both having right to buy.
If you have an Agent handling this for you, that agent will know to put that language in the P & S. If you don’t have agent, your lawyer should prepare #2 so as to put the right language in.
Our home went up for sale for $265,000 and in the process, we received several offers. We accepted an offer from a couple that offered $268,000 and placed a deposit of $3,000 payable to escrow. Well into the process, the prospective buyers hired an appraiser that appraised our house at $245,000. We didn’t agree with that appraised amount so we hired an appraiser ourselves who appraised it at $257,000. The prospective buyers only wanted to pay $252,000 but we stood firm on our sale price of $255,000. They argued that the appraisal that we got were for 4 bedrooms instead of 3 like our house. We argued that we are reducing our price by $10,000 and a fair and acceptable amount to us is $255,000. They backed out of the deal. They are now demanding that we sign a document that releases the $3,000 deposit that they made. In the process, they demanded a bunch of repair work to be done in our house even though the house went up for sale “as-is.” (no major repairs, around $1,000 was spent) We lost 2 of the back-up offers that we had because of them. Do I have to sign that document? I don’t feel the $3,000 is mine at all. I just don’t feel that they should get it back being that they were the ones that withdrew their offer. They’re not entitled to the whole amount anyway because they opened escrow and there were charges involved in that. I cannot sell my house to anyone else because their escrow on my house is still open until I sign this release of $3,000. What do I do? What are my rights?
Just based on your post, the buyer made the offer and later tried to back out because of an appraisal. Was their purchase agreement subject to any appraisal that would give them the right to back out or reduce their purchase price? Your rights will all depend on what your purchase agreement says. Without knowing what everything in your purchase agreement says, no one, and not even attorneys, can possibly answer anything you have posted. It all boils down to what the purchase agreement says and the laws in your state.
Did you use an attorney? If so, what does s/he say? If not, get one to read your contract and see what they say.
This is not legal advice. This is just plain ole common sense 101!