Who is responsible??

[angelcruise]

What is the name of your state? California
HELP! I sold my California home back in March (actual close date of 3/18/2005). My issue is that during the sale process I agreed (by signing an addendum) to credit the buyers at the close of escrow money for certain minor repairs. Well the Escrow Company never gave them that credit, and states they never received any thing from the agents (mine and theirs) about that addendum. Both agents swear they gave the info via fax to the escrow company. So here is my question, the buyers signed their closing statement regarding the funds, however I signed the addendum agreeing to credit them; which contract has precedence, the addendum or the closing statement? As I see it the buyers have already agreed to the closing funds, it’s a done deal right? Or do I have to try and come up with the money after the fact. Oh did I mention that I closed escrow on a purchase of a new house and put all the proceeds from the house I sold in to it! Any advise would be greatly appreciated.

Concerned Seller

 

[JETX]

the buyers signed their closing statement regarding the funds, however I signed the addendum agreeing to credit them; which contract has precedence, the addendum or the closing statement?

The closing statement is NOT a contract.
Based solely on the information in your post, it would appear that you are liable for the funds you agreed to in THE contract (addendum).

 

[absconder]

JETX is cool.........but Im curious is the closing the final word or the buyers contract with a back out clause?

 

[JETX]

JETX is cool.........but Im curious is the closing the final word or the buyers contract with a back out clause?

HUH?? Who said anything about a 'back out' clause.... or what conditions might trigger one.... if it exists!!

 

[angelcruise]

What about Escrow?

What about the Escrow Company? Isn’t there job to ensure that they included all of the provision of the sale? Isn’t that what they get paid to do? Should the burden of proof be on the realtors that they sent over the addendum? Since they faxed it the time, date and number is on that addendum. Isn’t that proof enough? The addendum stated that I would credit them the money at the close of escrow, through escrow funds. Escrow is closed and the house is theirs, is the addendum still an issue?

 

[JETX]

What about the Escrow Company? Isn’t there job to ensure that they included all of the provision of the sale? Isn’t that what they get paid to do? Should the burden of proof be on the realtors that they sent over the addendum? Since they faxed it the time, date and number is on that addendum. Isn’t that proof enough? The addendum stated that I would credit them the money at the close of escrow, through escrow funds. Escrow is closed and the house is theirs, is the addendum still an issue?

Okay, lets play this to the end.....
You refuse to pay the amount stated in your contract. They buyer files a breach of contract suit against you. You then try to include the escrow company and/or the agents with a 'theory' that they failed in monitoring the process. Problem is, each of them say that they did what they were supposed to (or similar). The bottom line as I see it.... the court will likely rule that YOU failed to pay the amount, no matter what failed 'safety steps' were there (if any). The court will then render an order instructing you to pay the agreed amount, plus possibly their attorney fees and costs.

Simply, you can't transfer your failed obligation to others simply because they overlooked YOUR breach.

 

[Happy Trails]

Angelcruise, didn't you find it odd that the check you received was incorrect?

 

[angelcruise]

I did not think the check was incorrect, I have limited knowledge on this process, I know what I sold my house for I know how much commission I was supposed to pay, everything beyond that I am at the mercy of the professionals. So when I got the check I had no idea there credit was not processed.
As for the response by JETX, I have since talked with the escrow company that did the transaction of the purchase of my new home; she stated that if both agents claim they gave the information to the Escrow Company then the Escrow Company should take responsibly. True I agreed to pay them that money however it was only agreed to be paid “through escrow proceeds.” The final statement was agreed upon by the buyers, they had just as much responsibility to check over that statement to ensure accuracy. She suggested I get a free consultation from a Real Estate attorney. I just feel I paid the Escrow Company to take care of these things, the buyers hired their agent to represent them, and all of those parties failed us; why should it be only I who has to suffer the consequence. I no longer have the funds to give the buyers, “you cannot squeeze blood from a turnip.” It would cost them so much more to take me to court than the money in question.
undefined

 

[BradleyS]

When I attend closings with buyers, sellers, or both.....the escrow company always gives me a copy of the HUD-1 for review.

The closing company HAS to close AS PER CONTRACT from what they have received.

Both of the REALTORS should have looked over the HUD-1, compared the HUD-1 to the agreements, compared the HUD-1 to any closing estimates that they may have disclosed to their clients, and reported to the closing company any discrepancy they find.

Didn't any of the REALTORS show up to closing and have their CLOSING FILE with them?

 

[angelcruise]

Neither agent was present at closing, and I live 300 miles away from where the sale closed. I did receive and review an “Estimate of Closing amounts” and as far as I could tell all was okay. I think the industry feels that the common real estate sellers and buyers know how all of this works and quite frankly we don’t, that is why agents, escrow officers, and all of the other players who make a profit are supposed to make sure it is done right! What are we paying them so much for if it is not to represent our best interest? The buyer’s agent made the biggest profit off this and she is the one being the most critical of me! It is extremely frustrating, and my trust with the real estate industry has been weakened

 

[divgradcurl]

why should it be only I who has to suffer the consequence.

Well, you are the one that received the "extra" money, you are the one that is benefiting from the extra money. If the escrow company was still holding the funds in their account, then clearly they would need to pay up -- but since they handed over everything to you, you had the money, so that makes you responsible.

You are right, somebody dropped the ball on this -- but that doesn't change the fact that the buyer is owed a certain amount of money, and you were paid that certain amount of money. This situation is somewhat analagous to paying a bill using your bank's online bill paying -- if the bank screws up and doesn't send in a payment, that doesn't relieve you of the obligation to pay the creditor when they come asking why you didn't pay them. Even if the buyer did decide to go after the escrow company, and even if the escrow company did have to cough up cash, the escrow company would then come after you.

Maybe you can go back to the escrow company and/or your agent and get them to reimburse you some of their fees for your trouble and inconvenience, but the bottom line is that you are responsible to pay the buyer what he is owed under contract.

I no longer have the funds to give the buyers, “you cannot squeeze blood from a turnip.”

You may not have cash, but you certainly now have an asset that a lien could be recorded against. You are far from "judgment proof."

It would cost them so much more to take me to court than the money in question.

Why is this? How much to you owe them? If it's within the small claims limit, then it would be easy. If it's more than that, yeah, they'll have to hire a lawyer -- but they might just do that. Then what are you going to do?

What you should do is figure out some way to pay the buyer. Maybe they will accept payments, maybe you can take out a home equity line of credit, something -- but you are not going to be able to duck responsibility by claiming you don't have the money. If they get a judgment against you, they will put a lien on your house, and it will remain there, collecting interest, until one day you decide to sell or maybe even refinance -- then it will get paid.

 

[angelcruise]

Thank you all for the advice! I have surrendered to the fact that I must pay them. I am having the Escrow Company amend it to the closing statement so it will be represented on my HUD 1 for tax purposes. I did however send out letters to all involved stating everyone’s participation in this mess. If anyone is interested in reading it here it is…..

To Whom It May Concern:
I am not sure this e-mail will ever make a difference or not but these words must be said!
I feel both myself and the buyers were wronged in this transaction. Nobody did what they were supposed to do, everybody played a part in this mess, and however nobody wants to take part in the clean up.
Neither agent was present at closing, isn’t it their responsibility to be at their clients side during the close of escrow ensuring the HUD 1 and everything else that is done is correct? What about the Escrow Company don’t they communicate with the agents prior to close to ensure they have received every thing, are they supposed to go over the final statement with the interested parties? Then the buyers, the closing statement has a detailed line by line itemize of credits and debts; how was a $1200 credit missed? Last but defiantly not least, the sellers (us) we agreed to credit the sellers although through the close of escrow we still made an agreement with the buyers. I know my excuse; I live 300 miles away from where the sale closed. I did receive and review an “Estimate of Closing amounts” and as far as I could tell all was okay. It listed clearly the amounts to be paid to the agents, however lacked the itemized line by line of the rest of the debts; like home insurance plan, Escrow and title fees, and whatever else us as buyers are responsible for paying. All I seen on that statement was the deduction of Real Estate fees, and our 2nd mortgage payoff. However I know we had to pay some other closing costs, what those were was not defined until the final closing statement was sent; I hold responsibility for not going over that statement again, however with the close proximity of the close on our new house I unfortunately trusted the process.
I think the industry feels that the common real estate sellers and buyers know how all of this works and quite frankly we don’t, that is why agents, escrow officers, and all of the other players who make a profit are supposed to make sure it is done right! What are we paying them so much for if it is not to represent our best interest? It is extremely frustrating, and my trust with the real estate industry has been weakened.

 

[BradleyS]

angelcruise,

If your still around.......

I understand your upset and the reasons why.

Don't let a couple of "rinky-dink, riff-raff" REALTORS have so much influence over your judgement on the Real Estate Profession.

There are definetly more of us "good guys" than "bad guys."

I spend a lot of my time answering questions and giving advice on this web site to help out people like yourself. I don't get paid for this and I don't ask anything in return or try to promote any business with the person who I possibly could help.

Any profession no matter the type, will have the good and the bad. Just because a doctor may have screwed up.....you don't stop seeing doctors? You just change doctors? Right?

If you would like help in finding the right REALTOR, send me a PM and I will write some "interview" questions for you to ask.

Hope this helps.....