What protection is available against a failed escrow for the removal of a property from the market during the prime summer months?
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What protection is available against a failed escrow for the removal of a property from the market during the prime summer months?
We own a house and have buyers that say they wish the house removed from the market. We fear that if for any reason the escrow fails, we will have lost valuable time on the market, the summer months. Can we require a non-refundable deposit IF they back out of the sale for any reason? If so, how much would be a fair amount for a house priced at $300,000?
Asked on July 18, 2010 under Real Estate Law, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Have you signed a contract with the buyers yet? If yes, and they have given you a check for the down payment and it has been placed in Escrow? Is the contract dependent on their getting financing? And you are fearful that they will not get financing or that the escrow will not clear? If the escrow check bounces and/or they try and back out of the contract then you are entitled to the damages as indicated in the contract (generally you keep the deposit unless qualifying for a mortgage is a condition or contingency provision).
If you have yet to sign a contract then removing the house from the market is a term that they wish to negotiate. You do not have to agree to it. If you wish to agree to it the make sure that the contract is not conditional upon their qualifying for financing to buy the house or that they can not back out for any other personal; reason (in other words a reason not related to the house such as termites, etc.) and ask for liquidated damages in the amount of the escrow. Generally it is 10%. Please do not do this alone. Seek legal help.
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