Home Buying in Hollister>Question Details

adriel.nicho…, Home Buyer in Hollister, CA

Seller refuses to extension days before closing

Asked by adriel.nichols, Hollister, CA Wed Nov 14, 2012

We are days away from closing on a new home. Our current purchase agreement is set to expire on Friday, November 16th, but we're likely to need until Monday, November 19th or Tuesday, November 20th to close (we are signing documents on the 15th or 16th). The sellers are refusing to sign an extension to allow us to finish the transaction and have threatened to cancel the contract. We have paid $3000 in repairs as the lender requested and over $1000 in appraisals and inspections, and will have documents signed by the 16th with no problem. We have submitted everything quickly, and our loan agent and real estate agent would attest to that. In fact, we have bothered them for progress updates on a regular basis. Can the sellers really stop the transaction? Will they have to pay us for everything we put into it? We have spent two long months gathering paperwork, stressing over contractors, and waiting several days for the seller to respond to every piece of paperwork. What are our options?

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14
You need to seek legal advice immediately. It is absolutely amazing to me that anyone let you put money in a house that was not yours. The California purchase contract strongly states that time is of the essence. If you can not perform per the contract guidelines than yes the seller has a right to cancel.
I would issue an extension to them immediately. You can also offer them a per diem in order to help them accept but there is no guarantee.
The fact you invested money in the house though I suggest legal advice asap. Good Luck.
1 vote Thank Flag Link Fri Nov 16, 2012
We had Section 1 repairs completed as was required by our lender to move forward with the VA loan. If we had not completed the repairs, we would not have been able to get the loan. We requested that the seller pay for the repairs, but they refused. We issued an extension days ago, and they refused to sign it. There was absolutely nothing we could have done to make the process go any faster. We signed papers today - we only needed one more business day to finish this.
Flag Fri Nov 16, 2012
If you are unable to perform and close according to the purchase contract, the seller has a right to issue a 'notice to perform' and then cancel the contract.

What has your Realtor done to impact the situation? When in this situation, I've had the lender write to the seller and assure them that we are close to closing. Also, offering the sellers a late fee can also help buy you some time. Here in San Diego, a $100 a day as a late fee is not uncommon. It helps the seller cover their costs of remaining in the home.

If not already attempted, I would employ both of these tips to buy you the time you need.

Best of luck.
1 vote Thank Flag Link Thu Nov 15, 2012
Wow. I hope you got your situation resolved satisfactorily. Your agent and the other agent should be doing everything they can to get this take care of ASAP. Deadlines are extremely important but lately lenders are having trouble with certain kinds of loans and this delays the process which frustrates everyone, but this is only a couple days delayed and it shouldn't be an issue. Sounds like the sellers are having second thoughts and are looking for anything to cancel this transaction. Sadly it might be time to see an attorney. I don't like getting them involved if you can avoid it but this might be a good time. Good luck!
0 votes Thank Flag Link Tue Nov 20, 2012
A request to perform is not used for closing of escrow. In the CAR contract, page 5, PH 14 E. states form DCE or Demand to Close Escrow.

You have a contract and because your lender has delayed you are in breach of performance. Recourses are spelled out in your contract. It is best to talk with your agent, their broker and the other side to see what can be done.

Perhaps if you offer to pay a per day fee to cover the cost the seller has loss due to the late closing. Just a thought.

All the best to you.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Tue Nov 20, 2012
What a pathetic agent you have. Any barely competent agent should have been way ahead of the curve on this. As is typical, as soon as your offer is accepted and the funding looks in place, it is see ya later.

You agent would get 3% of the price in commission (which by the way actually comes from you, not the seller - follow the money trail) and for that you are caught unawares or without information necessary to protect yourself?

Fire that incompetent agent immediately and get an attorney. Consider action again your agent, they are less than worthless.

Writing letters as suggested is not worth the paper of the letter. A lawsuit against your agent will start in the right place. You were taken to the cleaners by your agent. Too bad this happens far too often.
0 votes Thank Flag Link Tue Nov 20, 2012
UPDATE: Our contract has officially expired. A few days ago, when the sellers first told us they would not sign an extension, our realtor advised us that, if we were sure we wanted the house, we should continue on with the process and rush everything as best we can. We do want the house, so we proceeded and were able to get as far as signing documents yesterday. We did not receive a Notice to Perform. There is no other offer. The sellers' agent has been working very closely with our agent as well as the lender, so he is aware that we were nearly ready and I'm sure has passed that on. It seems to me that the seller has no reason for their decision not to extend - I can understand if we were three weeks away from closing, but if they sign documents on Monday morning, we can have it funded and recorded the same day. We have changed the closing documents in their favor, so they are getting about $1000 that would have originally gone to us. None of this seems to be helping. They seem just not to want to sell any longer.

I am hearing contradicting things on here - that the sellers are within their rights to walk away, or that they should have sent us a Notice to Perform. Our realtor is, understandably, very hesitant to give us legal advice, and just sort of wants to wait until the sellers respond in some way.
0 votes Thank Flag Link Sat Nov 17, 2012
So sorry to hear that you weren't able to come to a closing on the property. As Realtors we can never give legal advice, so you may want to consult with a good Real Estate Attorney to see what legal rights you may have. For the price of a consultation fee...sometimes a strong letter written by an Attorney is all it takes to get the seller's attention and move toward closing escrow. Again...best of luck to you!
Flag Sat Nov 17, 2012
Sellers always have the option and choice whether they want to extend the original terms of the contract. It should have been explained to you by your agent and lender that making repairs prior to close of escrow (before you own the home) would be done at a risk of losing the cost of the repairs if you failed to close on time (pursuant to the terms of the contract).
Also paying for inspections and appraisals is also the cost of doing your due diligence and meeting the requirements of your lender.
Hopefully by now you have resolved this and are proceeding to close escrow.
Best of luck to you!
0 votes Thank Flag Link Sat Nov 17, 2012
In CA the listing agent must give you a notice to perform before cancelling. If you have not received it then you should be ok.
0 votes Thank Flag Link Fri Nov 16, 2012
Like already suggested, you need to talk to your attorney for advice. Ask the attorney if you can do a "Dry Closing" where all papers are singed and then the transaction is funded at a later date. That may help your situation if possible.

All the best,

Gary Geer

http://www.ggeer.illinoisproperty.com
0 votes Thank Flag Link Fri Nov 16, 2012
Gary,
In California we have no such thing as a "dry closing".
Although it does sound interesting!
Flag Sat Nov 17, 2012
Sounds like the sellers have the upper hand and they intend to make good use of it. They may have a higher offer or seller's remorse as others here have suggested, or perhaps they are just trying to pressure you into offering them something for the trouble of adjusting the contract (ie: "we have you where we want you, so what's the extension worth to you?"). That would be sleezy, but completely legal. Hopefully your agent and their's are working to resolve this ethically. Best of luck...Jim
0 votes Thank Flag Link Thu Nov 15, 2012
I would want to know a little bit more about why the Sellers are not willing to extend? Sounds like they may be having Seller's remorse or is there a back up offer on the house. Your Realtors needs to be working with you on these questions.
0 votes Thank Flag Link Thu Nov 15, 2012
If you are able and ready to sign the Doc's tomorrow; what is the problem with Closing?
Do you not have all the money in Escrow that you need?
And if you don't; why don't you, you've had time!
And why aren't you working with your Realtor on all this? Do you not have a Realtor?
And if the answer to both of these questions is, NO!,
why do you think you are entitled to special treatment?
0 votes Thank Flag Link Thu Nov 15, 2012
The delay doesn't have anything to do with us not having money. Our purchase agreement stipulates that sellers are paying closing costs, we are using a VA loan so we don't have a down payment, and we have money in the bank for emergencies. With the earnest money deopsit we put down, we are actually scheduled to get money back at closing. We simply underestimated the amount of time a VA loan was going to take (apparently about 60 days). Everything that could go wrong did (we needed repairs done, the house appraised for lower than the original purchase price, etc. ), and so a lot of adjustments needed to be made. We are working with our realtor, but this situation only came up yesterday evening so I'm trying to get more opinions. I don't think I'm entitled to special treatment - I worked hard to get every required document in to the lenders within hours of them requesting them. I spent thousands of dollars fixing the Section 1 items so that the lender would push the loan through.
Flag Thu Nov 15, 2012
Hello Ariel,
The way you presented your story it sounds like you may have grounds to close your sale.
I'm assuming you had written approval from the seller and acknowledgments from the Listing Agent and your own agent relative to paying for repairs on a home you do not own. That could protect your $3,000. The $1,000 you spent for inspections and appraisal fees is gone. They are for your benefit.
Since your position goes a little beyond the written covenants of your contract I recommend that you cal the CA Dept. of Real Estate and seek their direction ((510) 622-2552).
Good luck.
Mike Walters
Mike@CaHomes411.com
831.630.3717 cell/text
0 votes Thank Flag Link Thu Nov 15, 2012
I would contact a lawyer and be prepared to file list pendants on the property.... I don't really understand why your Realtor cannot handle this. Is it possible the sellers have a higher price to offer Now?
0 votes Thank Flag Link Wed Nov 14, 2012
We originally agreed to pay list price with the sellers paying closing costs, but the home appraised for a few thousand dollars less than list price, so we took a hit on some of the closing cost credit in order to lower the purchase price. So, in short, the sellers will likely not get much better of a deal. Our realtor seems to be looking into things (this only came up this afternoon) but has said that maybe once we get the docs signed, the sellers will see that we are close and agree to the extension. Is this common?
Flag Wed Nov 14, 2012
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