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Canceling Contract in CA

Posted by strike5 (My Page) on
Tue, May 18, 10 at 12:53

My wife and I have been shopping for our first house for several months now.

A few weeks back we happened across a nice place in the hills while we were out looking at open houses -- it was obviously in need of some updating, but we're okay with that. Talking to the agent showing the house, we learned that the place needed about $20k in work (new roof, an updated electrical panel, some pest report stuff) and that the seller didn't want a deal where they had to pay for any of this.

We have some cash set aside to spend on such things so we took this into account when we made our offer, which was accepted by the seller.

When we did our own inspections, however, we discovered that a major retaining wall on the property was in danger of "imminent failure" and replacing it would be a very expensive undertaking. We submitted a request for repair to the seller, which they rejected -- they told us that the only way they'd fix the wall is if we agreed to pay more for the house, which is unacceptable to us.

So, we need to cancel the deal. We're within our inspection period. I realize that you're not lawyers, but I'm curious if anyone has had experiences here that they can share -- I'm paranoid that the sellers might hold up our deposit or otherwise mess with us.


Follow-Up Postings:

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RE: Canceling Contract in CA

Have done it a couple of times, but as it's handled by the lawyers and RE agents, you should have nothing to worry about. It's not something the sellers have much say about (and not to their advantage anyway as you can always threaten to take out a newspaper citing then as terrible sellers!).


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RE: Canceling Contract in CA

Who is holding the earnest money? If it's in an escrow account or if your broker is holding it in a Client Trust Account you shouldn't worry about it. What does your contract say about the return of earnest money in the event you withdrew from the contract? I work in a RE office, and we generally hold the EM for our buyers in our Client Trust Acct. If and when the sale falls we just cut them a check (providing their original check cleared the bank).


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RE: Canceling Contract in CA

The money's with an escrow company -- the contract states we can get it back assuming the seller can't prove we acted in bad faith.

I didn't think much about it until I saw that the cancellation form requires signatures from both parties, which I suppose makes sense but still makes me a bit nervous... I get the impression the seller's agent is a real nimrod, and I'd hate to end up in a situation where she tries to hold this over us to push through the deal.


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RE: Canceling Contract in CA

Where in CA are you looking? Hillsides are bad due to fires and mudslides. If you are in So Cal, you have very strict fire regulations also. Check to see if any permits have been pulled on work done. Have you had a inspection? It sounds like you are dealing with the seller's agent. You need either a lawyer, or your own agent, especially in this case.


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RE: Canceling Contract in CA

We have an agent and did our homework on the property -- my minor freakout was caused by the fact that we needed the seller's signature in order to cancel the contract and get our deposit back.

They signed, everything is good.

It's too bad, really. We would liked to have moved forward with this one, but there was just no way we could move forward once we found the problem with the walls -- the sellers just weren't willing to negotiate.


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RE: Canceling Contract in CA

In writing tell the agent you are canceling, he will probably send you the NRA form to sign. If you have any problem go in person to the office broker, get it all in writing.


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RE: Canceling Contract in CA

And now the sellers HAVE to disclose this necessary repair work to all future potential buyers.


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RE: Canceling Contract in CA

xine, that crossed my mind, too. Perhaps they aren't in a position to deal...or haven't grasped the reality yet.


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RE: Canceling Contract in CA

OP, I think you made a smart move.


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RE: Canceling Contract in CA

Don't worry. I was selling a home 5 years ago in LA & 5 escrows were cancelled by the buyers before the close. Luckily the 6th contract was the charm) My realtor told me that the buyer in Calif. is fully protected and it is practtically guaranteed that they will get their earnest money back. Good luck
Susan


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