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Good Faith Escrow Issue in Home Purchasing

This legal question related to general practice attorneys in Connecticut has been answered.

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Location: Connecticut  |  Law type: general practice attorneys
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I recently purchased a home and paid cash a few hours before closing we had found some repairs needed to be made on the walk-thru.

indicating that to our attorney and at closing we tried to get the sellers to give us a credit on the repairs, but they refused so my attorney decided to do a good faith escrow for the repairs indicating the seller had 3 weeks from the closing to make such repairs.  although, this was only verbal no written addendum and had the sellers attorney hold the money in escrow but there is nothing in writing only good faith.  now we have no meeting of the minds as to what repairs are to be done etc.  i truly believe my attorney did not have my interest. Is this unusual?  Please advise

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Legal Solution

The response provided below is specific to general practice attorneys in the jurisdiction of Connecticut. If the response is inadequate, please submit a detailed inquiry.

Understanding the Good Faith Escrow Issue in Home Purchasing

When buying a home, particularly in a cash transaction, the discovery of repair needs just prior to closing can be unsettling. In Connecticut, your described scenario, where funds were placed in an escrow without a formal agreement detailing the terms of repair, can indeed pose challenges. The absence of a written agreement specifying the necessary repairs and timelines places both parties in a precarious situation. Such verbal agreements can lead to disagreements about the interpretation of terms and, in the worst cases, potential legal disputes.

Relevant Connecticut Laws and Resources

  • Connecticut General Statutes: It’s vital to check specific sections dealing with real estate transactions, escrow arrangements, and property disclosures.
  • Connecticut Department of Consumer Protection: This is the primary regulatory body overseeing real estate practices and provides useful resources for buyers and sellers.
  • Connecticut Bar Association: This is a helpful resource to find the right lawyer familiar with local real estate laws and practices.
  • Homepage of the Connecticut Government: While this doesn’t link to specific statutes, it's a central point for all official resources related to the state of Connecticut.

Possible Solutions

  1. Written Agreement: Even if the transaction has closed, it's never too late to get a written agreement. Both parties can still come together to detail the specific repairs, the timeline, and any other conditions.
  2. Mediation: If disagreements arise, consider mediation as an amicable way to resolve disputes. Arbitration and mediation attorneys specialize in helping parties find middle ground.
  3. Legal Consultation: Given the potential complexities and risks involved, you might want to compare lawyers in your area who specialize in real estate transactions to advise on next steps.

Typical Legal Fees in Connecticut

Service Average Cost in Connecticut
Real Estate Contract Review $400 to $600
Mediation Session $1,000 to $3,000
Full Legal Representation in Dispute $5,000 to $20,000
Simple Written Agreement Creation $200 to $400

Note: The above costs are just estimates. Specific fees can vary widely based on attorney experience, complexity of the issue, and other factors. Always ask for detailed pricing information upfront.

Further Clarification Needed

To provide a more in-depth solution, it would be beneficial to understand the specifics of your situation better. Would you mind providing more details or documents you might have related to this issue?

Consider the Following

  • Was there any verbal witness during your agreement with the seller?
  • What was the exact amount placed in escrow?
  • Have you received any correspondence from the seller or their attorney after the closing?

Are there penalties for not having a written escrow agreement in Connecticut?

No penalties as such, but having a verbal agreement puts both parties at risk of misinterpretations and disputes. A written agreement provides a clear roadmap of responsibilities and expectations.

What if the seller refuses to make the repairs after the agreed period?

If there's no written agreement, legal recourse becomes complex. It would require proving the existence of the verbal agreement and its terms, which can be challenging.

Can I get the escrow money back if the repairs are not done?

This largely depends on the terms of the verbal agreement. If both parties can't come to an agreement, mediation or legal action might be necessary.

Is a verbal agreement enforceable in court?

Verbal agreements can be enforceable, but they are more challenging to prove compared to written contracts. Evidence like witnesses or correspondence supporting the existence of the agreement can help.

How can I avoid such issues in future transactions?

Always insist on written agreements, especially when it comes to financial matters or promises. Working with a reputable and experienced real estate attorney can also help avoid such pitfalls.

Remember, while online advice can provide guidance, it's essential to consult directly with an attorney to address your specific concerns fully.

Disclaimer

This content is for informational purposes only and does not establish an attorney-client relationship. It's always recommended to consult with a local attorney about your specific situation.

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Legal question "Good Faith Escrow Issue in Home Purchasing" has been changed 1 year 6 months ago. Demonstrate your legal skills and willingness to help and answer right now! Issue is related to the location of Connecticut & area of law: general practice attorneys.
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