October 22nd, 2011 at 12:01 am
In one deal, we represent the buyer and the listing agent insisted that we use his in-house escrow company. We agreed to get the deal. The contract with the seller provided for a $5,000 deposit and included the liquidated damages clause. Escrow opened and proceeded peacefully. The buyer made his $5,000 deposit and removed all contingencies except for loan. Two weeks before the scheduled close of escrow, our buyer sold his house and took $270,000 of his proceeds and put them in our escrow as part of his down payment. Of course, one week later the buyer’s loan was denied and our transaction was cancelled. We moved on to another property, and are now in a second escrow. Unfortunately, the seller in our first deal got angry and has refused to sign cancellation instructions or refund our deposit. In fact, not only is he holding the $5,000 deposit, he is also holding the $270,000 down payment. The escrow company, who is affiliated with the listing broker, doesn’t care that the seller is acting improperly. Instead, they are refusing to refund anything without mutual instructions. In other words, they are allowing the seller to hold our money hostage. As a result, our buyer cannot get his money to close deal no. 2. On the other hand, if this had been a Pickford Escrow deal, the buyer’s money would have been refunded. I am Pickford’s General Counsel and, at a minimum, would have instructed them to release the $270,000. Of course, by doing that, we would have satisfied our client and closed on their new home.
In two other deals, we had the listing and at close of escrow, the selling agent refused to give us their tax id number as required by law. As a result, we asked escrow to forward us the entire commission so that we could pay the selling broker when they gave us their id. Escrow refused, and held the entire commission, including our undisputed listing side. Even though no one claimed we were not entitled to our commission, the escrow company allowed the selling broker to hold our money hostage as they tried to get us to pay them without proper tax reporting. Again, this would not have happened with Pickford.
So, please remember how important escrow can be and fight hard for Pickford. Escrow handles the money and we want to be sure that the company doing that in our deals is competent. As always, please let us know if you have any questions.
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