As many of my blog followers know IÂ sell a lot of Palo Alto homesÂ in trust and probate. The owners were often very old, as are the homes, and frequentlyÂ in need of repair. While it is often a good idea to keep repairs at a minimum in order to decrease the liabilityÂ to the estate, sometimes it is necessary in order to allow buyers to be able buy and move into a home safely, or in order to increase the value exponentially.
I am currentlyÂ sellling a Palo Alto homeÂ that needed some major bathroom repairs since it was unclear an adult could stand on the bathroom floor without falling through to the crawl space. No amount of staging was going to fix that problem. The second bathroom in this Menlo Park home was not much better.
TheÂ seller of this Palo Alto homeÂ decided to redo both bathrooms and Preferred Termite company was generous enough to allow the $15,000 payment through escrow.Â
The house went on the market generating plenty of interest and multiple offers. TheÂ seller of this Palo Alto homeÂ chose a nice couple who were pre-approved for a loan and felt comfortable enough with the reports and repairs done by the seller that they waived the property condition contingency, knowing that there was still more work to be done on the termite report. They could use the new bathrooms and felt the rest of the termite work and replacing the roof could happen over time.
UnfortunatelyÂ their lender did not agree. There was no problem with the appraisal or underwriting. However, one day before we wereÂ due to close the funder looked at the seller's HUD1 (final closing statement) and saw that there was a $15,000 payment going to Preferred Termite. They said that all work called for on the termite report, including providing more access to the crawl space by making a new opening, had to be done before funding the loan.
Lesson learned. Fortunately neither theÂ seller of the Palo Alto homeÂ or the buyer were trying to meet a deadline so the buyer switched lenders, the Palo Alto home seller will pay the termite company out of escrow so it is not on the closing statement and we will close in 2-3 weeks.
So remember, whenÂ selling a Palo Alto homeÂ do not put payments for inspections or termite repairs in escrow or the buyer's lender may ask to see them and muck up the sale.
If you have any questions aboutÂ selling a home inÂ Palo AltoÂ please fell free to contact me.
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