Home Buying in Placentia>Question Details

Dave Kim, Home Buyer in Placentia, CA

Delay of close of escrow

Asked by Dave Kim, Placentia, CA Tue Sep 1, 2009

Hi,

We were supposed to close the escrow last Sunday. however, my loan officer told me TWO DAYS before close of the escrow that they should submit a home inspection report which was actually on the loan conditions issued a couple of weeks. He thought it would just go by without submitting the report. He knew the closing date and he had never mentioned that he could not make the closing date until he brought this up. Since i am getting a fha insured loan the report will open up all the repairs and which will delay about 2 to 3 weeks. There's a penalty of 100 dollars/day. who should be liable for this penalty.

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I've run into the penalty situation a couple of times for what ever reason. Here's what has worked for me as the buyers agent. I write up an addendum requesting the penalty be waved until a certain date and the penalty is resumed after that date. The tricky part is the reason for the delay. It needs to be something that's not in the buyers control that caused the delay. Remember most sellers ultimate goal is to sell the property, even banks. I have found they are usually pretty cooperative. So speak with your agent for the addendum.
Good luck, tom
1 vote Thank Flag Link Tue Sep 1, 2009
You're in a tough spot. The Loan officer should have submitted the report earlier to prevent this delay. The contract for the purchase, however, is between you and the seller and not between the seller and the loan officer. Therefore, you are legally liable because it is your contract, not the loan officer's. I would talk with your loan officer, however, and see if he will cover some of the costs. Also, you to make sure that these penalties don't violate any FHA rules/conditions associated with the loan. $100 per day x 21 days = $2100. That's a lot of money and the lender may not allow you to pay that. You should check on that too.

In the end, everyone needs to work together as a team; the buyer, the seller, the agents, and the loan officers. Ultimately, you want to get into a home and the fact that you are this far along is great. You'll be living in that house before you know it and all this will be in the past. Don't let it ruin your enjoyment of your new home.
God bless.
1 vote Thank Flag Link Tue Sep 1, 2009
By the way Dave,
What is the status of your closing, if you don't mind me asking?

js
0 votes Thank Flag Link Fri Sep 11, 2009
Hi Dave,

A home inspection? A home inspection is for you to see the condition or possible defects of the property and from there making a decision if it is worth you purchasing and fixing before your 7 to 10 day inspection period.

I think it's the termite inspection and not home inspection that you are thinking about.

Why is it going to take up to three weeks to repair? Is there mold?


Your lender dropped the ball as well as your agent, if the property needed those repairs, FHA wouldn't fund until they were completed. Your agent should of advised you to request for repairs (the seller paying for the repairs).

That is lame, the lender can't assume it will go away magically, the funder will send an FHA inspector to see that the house can be occupied from day one of closing.

Has everyone signed the FHA Amendatory Clause, they always send this one last and at times it takes a while for everyone to sign.


Pointing fingers isn't going to get you anywhere at this point.

Talk to your agent's broker and see if they have an idea of what to do. Everyone wants this to close, trust me.

Ask for an extention of escrow, have the seller waive the per diem, if that doesn't work have your agent negotiate with escrow in lowering their fees, your lender putting up some money as well as your agent and yourself.

This is a reminder to all of us agents, why we have to be on top of things and following up. At times it seems like I don't what I am doing because I follow up so much and question the escrows and lenders process. Every sale or purchase is processed differently and I'd rather ask stupid questions (although there is never a stupid question, as they say) than deal with something like this at the last minute.

Don't stress out Dave and relax. It will just make it worse....... Inhale, exhale and relax.


Wishing you the best Dave,

Jes Sierra, B.Sc.
Century 21 Realtors®
0 votes Thank Flag Link Fri Sep 11, 2009
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