What to Do if Seller Is Delaying Escrow

For most people, purchasing a home is a significant milestone. This is especially the case in Southern California, where buying a home represents an outsized investment compared to much of the rest of the country. However, the journey to homeownership can be fraught with challenges that threaten to derail the transaction if not handled carefully. One such instance occurs when the seller causes delays in the escrow process. When a seller delays escrow, it can lead to frustration, additional expenses, and even the risk of the deal falling through. Below we discuss some of the reasons that lead to delays in escrow and what you can do about it as a buyer facing this unwelcome hurdle. For assistance with a residential or commercial real estate transaction as a buyer or seller in Southern California, contact Rounds & Sutter to speak with a skilled and knowledgeable Ventura real estate lawyer.

Identifying the Reasons Behind Escrow Delays

Escrow, a critical stage in real estate transactions, involves a neutral third party holding funds and documents until specific conditions are met. An escrow account might hold funds to cover property taxes and insurance, as well as the good faith deposit or earnest money the buyer puts forward when making an offer to purchase the property. Escrow accounts can also be used for other specific conditions related to contingencies of the needs of the parties.

Escrow delays can upset the closing of the real estate transaction. Before taking action, however, it’s important to understand why the seller might be delaying escrow. Common reasons include:

• Unresolved contingencies: The seller might be working on clearing contingencies such as repairs, inspections, or obtaining necessary permits.
• Financial issues: The seller may be facing challenges with their new home purchase or other financial constraints.
• Legal complications: There could be unresolved legal issues related to the property that need addressing.

Steps to Take When Facing Escrow Delays

1. Communication and Negotiation

Effective communication is key. Engage in open dialogue with the seller to understand the cause of the delay. An attorney with expertise in real estate law in California can facilitate these conversations and negotiate on your behalf.

2. Review Contractual Agreements

Examine the purchase agreement for clauses related to escrow delays. Typically, these contracts include provisions for how long delays can last and the consequences for causing undue delay.

3. Seek Legal Counsel

If the delay is significant or the seller is uncooperative, seeking legal advice is essential. A real estate attorney can provide guidance on your rights and potential remedies under California real estate law.

4. Request for Compensation

If the delay incurs additional costs, you may negotiate compensation. This could include asking the seller to cover extra expenses or adjusting the final purchase price.

5. Consider Extending the Escrow Period

If the delay is due to a valid reason and you’re still committed to the purchase, consider extending the escrow period. This requires a formal agreement and should be done with legal advice.

6. Explore Legal Remedies

If negotiations fail, legal remedies may be necessary. This could include mediation, arbitration, or in some cases, litigation. Rounds and Sutter can represent your interests in these proceedings, ensuring that your rights as a buyer are protected.

Preventing Future Escrow Delays

To minimize the risk of future escrow delays, consider the following:

• Thorough Due Diligence: Conduct comprehensive checks on the property and seller to identify potential issues early.
• Clear Communication: Maintain open lines of communication with all parties involved in the transaction.
• Professional Assistance: Engage a real estate attorney early in the process to navigate complex transactions and legalities.

Help With Real Estate Transactions in Ventura County

Escrow delays by sellers in real estate transactions can be challenging, but they are not insurmountable. By understanding the reasons behind these delays, effectively communicating, and seeking the right legal advice, you can navigate these hurdles successfully. Rounds and Sutter, with their deep understanding of real estate law and practices in Southern California, stand ready to assist you every step of the way, ensuring your path to homeownership is as smooth as possible.

For personalized assistance with your real estate transaction in Oxnard, Ventura or throughout Southern California, contact Rounds and Sutter today by calling 805-650-7100 to discuss your needs and goals.