Posted by Kristine-CA on May 23, 2003 at 14:43:13:
JD: You might want to find out what is customary for your area. But I have yet to pay for any escrow or title fees from a cancelled escrow. As the seller, escrow companies here allow you to start over again with a new contract, etc. Many sellers would never be able to sell their house if they were charged for every buyer that cancelled or couldn’t get funding.
That being said, I have had escrows where the agent required that the buyer and seller sign an agreement regarding payment of escrow and title fees if there was a cancellation. (But that was because there had already been three escrow cancellations in a row.)
If you post where you are located, you might get a response from someone in your area that can help you. Sincerely, Kristine
A house I own was supposed to be sold last week, but the borrower couldn’t get financing. As the seller do I owe the title company for any charges on the settlement statement? I haven’t paid them any money yet.
If the property is still for sale, then you can keep the file open. If you are taking the property off the market, then someone has to pay for work already performed. Now whether it was you, or your agent on your behalf, or the buyer’s side; someone will pay based on who was responsible for the order.
Or the title company may just ‘eat it’ if they are used to dealing with someone in the transaction. Basically a case by case basis. Your contract may read that you as the seller were responsible for the clear title and open up the escrow process. You can check your contract to see what the wording says about this situation.
That is a legal question. I am not an attorney, so any answer I give is suspect. You might want to consult an attorney.
Remember the army rule of thumb: “don’t volunteer” to pay. They may ask for it. If you ignore them, it is very unlikely that it will go any further than that.
If possible, suggest to your next buyer(s) that they use the same escrow/title company. Then that company will get the business and they definately will not go after you for the first problem.
Ask them to keep the escrow open for a while until you can get a new buyer. Remember, however, that the buyer has the choice of which escrow to use. You can not require them to use a particular one. You can suggest and guide, but no requirement. Most homebuyers will not have a strong choice and you get them to use the one you want. One argument: the company has already done work on the property and their preliminary title report is known to be good. Also, it can close fast, if that is a benefit to the buyer.