What You Need to Know About Escrow Cancellation
Our world is experiencing events and circumstances that none of us could have foreseen. News changes by the minute, and even though we may not be able to predict what is to come, if we know how to handle the situation, things can go much smoother.
During these changing times, many home buyers and sellers are finding themselves in the middle of a transaction that has changed, and a cancellation is now needed.
It is important to note that the Escrow Holder can only act on a mutually-agreed instruction from both the buyer and seller. It is critical to review the terms, options and requirements of the cancellation carefully with your agent so a mutually agreed to solution can be presented to escrow. Once the terms of the cancellation are agreed to, escrow will require the buyer and seller to sign the cancellation instructions. This includes the disbursement of any funds held and any funds due from the seller for outstanding items.
So, what happens if your escrow ends up in a cancellation scenario?
- Review and understand the terms of the cancellation, including disbursement of deposit and payment of any outstanding invoices. Discuss options with your agent and request any outstanding invoices from escrow.
- Once Escrow is in receipt of the Escrow Holder’s cancellation instructions that have been signed by all buyers and sellers, the Escrow Holder can proceed with the cancellation process. The Escrow Holder can then order the release of the EMD as per the mutual instruction.
- It is recommended that the buyer return any original, non-digital copies of reports and/or HOA documents with the cancellation instructions.
It is important to note that if either party has a dispute over the release of funds called for in the CAR Cancellation of Contract (CAR Form CC) or the CVA & NUCC Forms, the Escrow Holder will hold funds until such time as the dispute is resolved.
If you have questions about this topic or need assistance with an escrow, please reach out. We are an essential services company, so our team is here to assist you in any way that we possibly can.