Profile picture for SandraRChavez

When escrow fails to close, as the potential buyer should I expect 100% of my deposit back?

I recently opened escrow for a VA loan and was asked for $6K to open on a house my husband and I found. About 19 days into a 45 day escrow the lenders realized my husband did not qualify for the VA loan and thus we're walking away from the house and will not close escrow.
I was under the impression I would get all $6K back since escrow did not close; however they are stating they need to keep $450 for fees? Is this normal?
  • August 05 2011 - West Covina
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Answers (9)

Profile picture for sunnyview
Cancellations fees can apply for escrow if you agreed to them. Ask to see their written cancelation policy in writing. 
  • September 18 2011
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Some escrows will charge a buyer and/or a seller a cancellation fee for their services. You should consult the escrow company beforehand and review their escrow instructions for their particular policies. You might be able to negotiate a credit with the escrow company if you open a new transaction with them. 
  • September 18 2011
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Ms. Lewis is correct in saying the lender should have known your husband couldn't qualify for a VA loan much sooner than they did. I can often find ways to get VA loans approved that others can't - would you like me to try?
  • August 13 2011
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Escrow companies are entitled for payment  for the work  for opening escrowe, collecting the paperwork, and closing the escrow.  It should be stated as such in your paperwork

David Cooper
  • August 05 2011
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Need to know what those fees are.  If you had ordered an appraisal that was to be paid at closing and it was provided, then the appraiser is entitled to that payment.

Have your realtor throroughly review the fees and the contract/addendums
 
  • August 05 2011
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 It would be worth an investigative call to both your escrow officer and your realtor to find out what they are basing this on.   Both your realtor and your escrow officer should be able to clearly show you on the paperwork where this is written. Often the VA paperwork will state that you get a complete refund, even if a bank addendum states differently.  Was this a bank owned property?   This sounds like a bank addendum.  

However, like everything else in real estate... you could ask your realtor to negotiate it (split the difference, perhaps?) with the seller.  You will have to sign something to authorize escrow to release the money to the seller and you will also have to sign a "Cancellation of escrow" . Until you release the funds, your money stays in escrow.  
  • August 05 2011
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One of the docs you signed, if you did, opening escrow probably authorized them to keep some monies for costs. While rare they would actually keep any money....you did authorize them (check your docs) to do it and they did. You might ask them to credit that amt on a future deal and/or you could fight them and they may refund it/some. And if an appraisal was done and you didn't pay cash you would have to pay for that for sure. Good luck.
  • August 05 2011
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Profile picture for Sharon Lewis
I am so sorry to hear that you couldnt close on your house, that is a heartbreak. I wonder why the lenders didnt know earlier that your husband didnt qualify? 
Unfortunately a lot of times that fee does get held back by the lender.
  • August 05 2011
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Profile picture for wetdawgs
yes
  • August 05 2011
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