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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 53974
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I'm a buyer in California. Escrow should have closed

Customer Question

I'm a buyer in California. Escrow should have closed 7/17/15. in agust to seller issued a Demand to Close Escrow but later granted an Extension of Time Addendum. At the close of August a Second Extesion of Time was given. Time is out on 9/11/15 and lender is ready to fund. However we received a Cancellation of Contract from the buyer. is the buyer suppose to issue another Demand to Close Escrow. We desire to Close and purchase our new home
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Richard replied 1 year ago.

Good morning. My name is ***** ***** I look forward to helping you.

Just to clarify, the deadline for closing provided for the second extension has now passed...is that correct? Did that extension contain any grace period? Was the failure to close due to Seller? Thanks.

Customer: replied 1 year ago.
To clarify the second extension expired Sept 11, 2015. There was no grace period provided. The failure to close has bee due to my lender delays. However now they are ready to produce docs.
Expert:  Richard replied 1 year ago.

Thanks for your reply. You are in a bit of difficult position here because you've passed your deadline. As a result, as between you and your seller, your seller does have the legal right to terminate the contract due to the extend date having passed. But, as between you and your lender, you would have the right to pursue the lender for damages due to their delay causing you to default under your purchase contract. You would want to to send them a demand letter seeking your damages and letting them know if they do not timely comply within a short specified period of time with your demands, you will be filing a suit for not only actual, but also punitive, damages due to their gross negligence in handling your loan. As for your seller, you may want to ask the seller what, if any, additional price you could pay to entice them to close and then include that in your damage demand from your lender.

This is the part of my job I don't like...when the law is not in favor of my customer. I wish I could tell you that you could force the seller to further extend the closing date, but, I can only provide you information based on the law so that you can act on the best available information to you. ………..I wish I had better news, but can only hope you recognize and understand my predicament and don't shoot the messenger. I'm sorry!

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). I thank you in advance for taking the time to provide me a positive rating!

Customer: replied 1 year ago.
Real Estate contracts in California provide for cancellation. But the seller must first issue a "Demand to Close Escrow" prior to cancellation not prior to 3 days to scheduled close date. The last Extension of Time Addendum move the close date to 9/11/15. Wouldn't they have to issue another "Demand To Close Escrow" DCE prior to issuing Cancellation. Therefore the cancellation is premature? My lender is ready and could perform and close escrow. Or was the August 11, 2015 denad to close sufficient and I out of look. As you can tell I really wanted this house. We even added a daily per diem with the extension to compensate the sellers for waiting.
Expert:  Richard replied 1 year ago.

Thanks for following up. You can certainly take the proactive stance that since they did not send you the Demand to Close Escrow that you still have the right to close. Along with that demand, I would then let them know that if they refuse to do so, you will be filing a suit for specific performance asking the court to force them to close and along with that be filing a lis pendens (which is a fancy legal term for a lien in this situation) against the property to prevent any sale of the property while your suit is being adjudicated. This will likely cause your seller to comply with your demands rather than to face a suit and the inability to sell to anyone while that suit takes place.

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