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Buyers Alert - Cancelling escrow is not free

I suspect many buyers believe that they can cancel an escrow and not lose any money. Not 100% true. Some escrows in North Orange County real estate have a cancellation fee, plus some out of pocket costs that escrow has to pay will be allocated to the buyer. Even the sellers cost of HOA documentation fees will be paid out of the deposit of the buyer (only until either another escrow is open on the property or the seller brings in some money to escrow). This will surprise many people. But remember, the only money in the escrow to pre-pay HOA document fee is the buyers money - until escrow closes of course. So be alert Buyers - you may not get all of your deposit back. (At least right away)

Posted by Robert Foust |North Orange County | Fullerton Real Estate | Brea Real Estate on 09/29/2009 02:54 PM

Comments (6)

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Originally posted at: Foust Team Real Estate Blog: Buyers Alert - Cancelling escrow is not free

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6 Comments on Buyers Alert - Cancelling escrow is not free

SEP

Not a bad idea.

Carla - thanks for the comment - I just wanted to get the word out to the first time buyers especially. Better to be informed than to be surprised.

Good information. They should also understand, it takes both parties to release the deposit.

SEP

Jim -- that is a very good point -- some how they need to be told about all of thes issues -- hope our posts get seen. Thanks, Bob.

OCT

I have very rarely charged an escrow cancellation fee, but in situations that require a great deal of title clearing I may ask for a non-refundable work fee from the seller in advance of closing to cover recording fees and the hours it takes to clear some titles.

Hi Julie - I have to agree that most escrow companies do not charge a cancellation fee - but it does happen, and the HOA pre-pay is currently a big hole we can fall into - I am now having my buyers refuse to advance the $ -- and the seller has to bring money into escrow for the HOA pre-pay (rightfully so - it is in fact his charge and his HOA). Thanks for the comment.

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