Thread: Can I sue the Escrow Company for not doing their job?

You have a couple of things going on here...

1) It was YOUR decision to take the home off the market - right? It's always the sellers choice to continue marketing the property or to take it off the market. Just because it is under contract doesn't mean you cannot stop showing it and getting back up offers and contracts.

2) If the deposit/earnest money check bounced, then you never actually had a contract. The contract probably states that the buyer has "paid over/given up/deposited with" a certain amount of money. Since they never actually did that, there was never actually a contract. And since they didn't make the check out to you, you really can't go after them for writing you a hot check.

3) As to why it took so long for the check to come back bad - there could be a couple of reasons which cannot be discerned from the information provided - it could have been an out of state bank that it was drawn on and there is usually a 7 day time period that the escrow company has to deposit the check. Add to this that it could take up to 10 days for an out of state check to clear and you are 17 days down the road.

****this is not legal advice****

I back up RocketFuel...

It will cost you a lot to in legal fees to go after the Escrow company and prove there negligence if any. There are a lot of third party ties to this whole transaction. Escrow is there to handle the closing. If checks are not clearing then it is not necessarily Escrows fault.

Good luck with it

Originally Posted by edbates2004

Here is the deal, hopefully I am posting this in the right forum.

I am selling my house in Las Vegas. On April 25th I got a cash offer. We entered escrow on April 29th and the buyer deposited a $6000 earnest check to start escrow. Escrow is set to close on May 27th.

Today, May 21st, I find out the buyer can't get all the funds together to close escrow and is pulling out of escrow. I told my agent that I want to keep some of the earnest money, as I did take my house off the market, plus I did have another buyer interested and now they are gone.

At the same time I am telling my agent this, she gets a call from Escrow, saying the earnest money check bounced for NSF. Now this is 6 days before we are suppose to close (actually 4 working days). Why would it take the escrow company 3 1/2 weeks to find out that the check bounced? If I knew this the first week of escrow, which I believe I should of, I would of kept the house on the market and also possibly sold it to the other couple. I totally believe escrow dropped the ball here and should be held accountable for their delay in cashing the check. Isn't this the reason there are escrow companies???

Any feedback would be great!

thanks again!

There is an existing privately maintained road that terminates 330 feet before reaching my parcel. The last 330 feet are the southern lot line of the neighboring parcel adjoining mine, so I need to cross this property to get to mine.
Online Marketing Manchester

A couple of things need to be looked at, and it looks like this is an old thread, but woth covering for others.
A) If the deal was all cash you can request that you see proof of funds, you would have seen right there that they didn't have the money and would have never accepted it.
B) The EMD could have been requested in the form of a cashiers check.
C) We are in a gambling town, if you want to make the buyers life miserable take it to the police, they will tell you where to take the check as I beleive writing a back check here in Vegas is a misdemeanor.
A should have been a given, B should be put in writing in a counter.

Las Vegas Realtor.

Your best bet is to consult an attorney and get his opinion. A real estate agent can't address a legal question of this nature.

I believe in some states bouncing a check of that size is considered a felony. If the buyer is backing out of the deal and IF under the terms of the purchase agreement you are entitled to all or a portion of the earnest money, you should be able to go after the buyer. I don't think you'll have a chance against the title company, since it can often take a long time for a check to officially bounce.