Oliver, thanks. Interesting, isn't it?

Christopher, although every single escrow and title company has the right to do this, I have never seen it done. So, to blame the Realtor I don't think is appropriate. We have not seen this done. Most Ttile companies want the business and this is a sure fire way to make sure that you NEVER get the business from the Realtor who client was just "screwed."

Debbie, I have no idea if you're right or not. However, it's important that all of us be aware of this and figure out a way to protect our clients. Whether it is handwriting it on to page 8 of 8 of the Purchase Contract or some other way...we need to make sure that our Buyers are not at the whim of the Title and Escrow Companies.

Roberta, doesn't look like any of them are stepping up. I spoke to my own Title Company (Sacramento, Placer and El Dorado Counties-have Title Companies that are both Escrow and Title), and was told that the only time they have ever billed based on a cancellation of contract is with a FSBO. As my Title Officer said, " we are in the business to get business not turn business away." As she very succinctly put it, Realtors lose out when there is a cancellation, as well but they don't get anything for their time so why should we?

Mary, as far as I know this is a right that they have to do this but don't exercise that right. We just need to be cognizant of this and make sure that our clients won't be the first to have this happen. What we need to figure out where to write the verbiage since the Purchase Contract is not between the Escrow/Title Company but the Seller. We need to brain storm.

Bill and Barbara,we all do but the point here is that although this has not been something that we have seen in the past, it is obvious that some are opting to excerise this right. Having this happen to even 1 Buyer is 1 too many so it's best that all of us figure out a way to make sure that we protect our clients from here on out as it comes to any possible cancellation.

Bob,no the agent didn't know.  Funny that you mention that they escrow company is owned by Prudential since they are the same ones in the example...hmmmmmm Not sure you are right about the Buyer not being liable. Again, I stress that we really need to investigate this much more for a better understanding of helping the client. In this case, since the cancellation was during the disclosure period, escrow instructions were not signed. And in the case of my Title officer stating that the only time they have charged is on FSBO cancellations. Again, escrow instructions are not signed. We need to rethink our strategy.

Remember, it is not only a hard time for Realtors, Home Inspectors, Pest Companies, Appraisers etc...it's also rough for the Title and Escrow Companies and it looks like some may be finding a new revenue source.

Bob, thanks for looking into that. In our area, escrow instructions are not signed until the actual signing occurs. Our Title Co. and Escrow Co. are one in the same. The Title officer told me that she has billed FSBO's in the past who cancelled. Since, escrow instructions are not signed until the end at the actual signing, I am wondering how this is happening. 

I will pass your information on to Roberta who had the incident happen in Southern CA with Prudential Escrow Co. Thank you for taking the time to check with the attorneys in your area.