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Where do I go to ask someone about ernest money in a real estate action in Calif?
We are selling our ranch in Ca. Potential buyer put up $10,000 earnest money and entered a 30 day escrow. We moved across country and were out in time for close. Never heard from potential buyer again or RE agent. Money still with Title company, 6 months later. Our ranch is still listed and we are still showing it. Our RE agent says it won't interfere with new possible buyer. Is that true? Where do I go to find out for sure - I don't trust that my RE agent knows for sure.
It depends:
1. When you entered escrow, did everyone sign the escrow instructions?
2. Did you and the Buyer initial the liquidated damages clause in the purchase contract?
If the liquidated damages clause was initialed by everyone in the purchase contract, then it shouldn't interfere with the closing of your new escrow. The contract requires that the parties go to arbitration before any court action is taken. Has anyone attempted to contact the Buyer or their agent?
The Buyer's earnest money deposit will not have an impact on your transaction. You can't demand that the title company relinquish the funds to you because they're a neutral party; they will require you and the Buyer to sign mutual cancellation instructions, and those instructions would have to state that the funds are to be forwarded to you. You can request that the title policy state their requirements for cancellation, and the disposition of the deposit, to you in writing if you want assurance. If you decide that you want to go after the deposit at a later date, you should contact a Real Estate attorney.
If you're not satisfied with their answer, do a search under the California Civil Code with a sub-category of real estate deposits. It's available on line.
The deposit in the old transaction should not hinder the closing of the new one.
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