Legal Question in Real Estate Law in California

Re: Teacher burned during escrow

Was the purchase contingent upon your obtaining a loan? Also of importance is whether you signed the liquidated damages provision. Escrow cannot cancel unless they get instructions to do so by both sides. Take your purchase documentation to a real estate attorney for review.

Re: Teacher burned during escrow

I concur with attorney Deming in that the entire matter is dependent upon how the transaction was documented. You need to have a competent attorney review this immediately so you can properly analyze your options. You have two real options. First, you can sue for the return of your deposit - without a thorough review of the matter, nobody can tell you if you will prevail or not. From what you have posted, it sounds like you may have had grounds to cancel without penalty, but again, someone competent needs to thoroughly review the documents and facts pertaining to this. The risk of suing is that if you lose, you may not only lose the deposit or some part thereof but also end up with an attorneys fee award against you. Conversely, if you win you may be entitled to recover your attorneys fees from the Seller.

Second, you can attempt to reach some sort of amicable settlement with the Seller. Cancelling a week before - even if you were not at fault is a hardship to the Seller, and perhaps you can negotiate some sort of settlement with the Seller's attorney. You're starting at just over half of the deposit, so you're actually starting from a better position than some I have seen. Most attorneys would have probably demanded release of the entire deposit to their client.

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Re: Teacher burned during escrow

You probably do not owe the money but you might have to litigate. Try to resolve the matter amicably.