I am selling a property through an agent and received a contract from a lawyer representing himself as agent in Dec. 2009. He stated that he would obtain conventional financing and close on March 1. 10,000.00 earnest money was placed by parties in escrow. We have received notice that FHA financing was denied on Feb 22. There is no indication that conventional financig was applied for. Our agent has provided buyer with pre approval from 2 alternate lenders and we have offered time for delayed closing. Buyer refuses to apply and threatens legal action representing himself at $275.00 per hour if we do not release escrow today (Sunday) by 5 pm pst. Our agent is out of country. We were told that binding arbitration is next step. Is this true? Are threats abuse of bar?
Real Estate Attorney
There are two ways arbitration is triggered in Washington- by contractual agreement or by the mandatory arbitration rules in the district in which the dispute is located. It is extremely common for real estate purchase contracts to contain an arbitration clause, so you should be prepared to review the real estate purchase contract to see if this applies. Additionally, most counties in Washington, unless the claim is exempt for some other reason, disputes in the amount of $50,000 or less are subject to mandatory arbitration under the guidance of the court system, so your case may also be subject to mandatory arbitration for this reason. There is also a third possibility, called a joinder action, which may be commenced by the escrow agent if an agreement between the parties on release of the funds is not reached. You should consult an attorney to discuss the ramifications to your specific case of a joinder action.