The lis pendens provides a vital security measure, and may prevent an exorbitant amount of fees down the road when trying to obtain the property from a subsequent buyer. The recording of a lis pendens can be costly as the lawsuit must be drafted and filed concurrently with the recording. This limits the seller’s ability to try and sell the property to someone else at a higher price. The lis pendens provides prospective buyers and lenders with notice that you have a pending action with the seller (Cal. One of those includes the filing of a lawsuit for the purpose of recording a lis pendens. However, there are several exceptions to this. Most of the standard real estate purchase contract forms in California have a mandatory mediation provision, requiring the parties to mediate prior to initiating any court action. In the event that you are the buyer in this situation, there is relief for you. A rise in the market value of the home or difficulty obtaining alternate housing is no excuse for the seller to fail to perform. Unless the buyer’s transaction with the seller is contingent on the seller obtaining alternate housing, which is rarely the case, the two reasons mentioned above do not relieve them of their duties to the buyer. Second, the seller has issues obtaining alternate housing, either due to lack of availability or a failed deal. First, the market has fluctuated and they think they can get a higher price from a subsequent offer, so they refuse to close at the lower agreed upon price. Typically, sellers refuse to close escrow for one of two reasons. Here is an outline of the options a buyer has when the seller refuses close escrow: Now what? Don’t worry, as the buyer you have strong options. That is, until the closing date comes, and the seller refuses to close escrow. The paperwork is drafted and signed by both parties, life couldn’t be better. Finally, your offer on your “dream home” has been accepted. The competition is intense, with there being more buyers than sellers. If you’ve recently purchased a home, or are looking to buy, you know how tough the market is.
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