We went into escrow on a house in late January. We've met every lender requirement for debt-to-income, credit score, earnings, and down payment to get the house. We've returned any documents related to lender conditions within 24 hours each time without exception.
Yet we're just about to hit 60 days in escrow...
The lender blames the broker. The broker blames the lender. They both blame the FHA (it's an FHA loan). The lender's appraisor valued the house at $30K below the FHA appraisor, and $10K below the purchase price. The seller came down to the appraised price in order to keep the transaction moving along, but the lender then sat on the paperwork for 6 BUSINESS DAYS! because they put it back at the bottom of "the stack".
As the buyers, we've pushed, yelled, fought, and have even spoken with a VP at the lender's company. As it sits, we are now feel powerless to change or affect anything. It's too late to find a 2nd lender because the seller just asked us to release all contingencies and that Notice to Perform is probably around the corner.
So before you try to put more pressure on the buyer, perhaps check with their real estate agent to see if the buyer actually has any ability to affect the speed of the transaction. They too might be at the mercy of imbeciles.
It sounds to me as though you are selling without professional representation.
Is that correct?
Because we do not know the details of the your case IMHO it would be unethical to give you advice. If you need legal advice, ask an attorney.
I will report that in California the standard residential purchase agreement has provisions called contingencies that the buyer has (the default period is 17 days) including loan approval, physical inspection, and property appraisal.
Normally a listing agent (representing the buyer) will monitor the buyer's progress and if there is a problem with financing (which is not uncommon), suggest solutions. I personally recommend to buyers that they have a back up lender. It is possible for the seller to REQIURE that the buyer co-app with another lender.
It is also possible to have the buyer REQUIRED to perform or the seller cancels the listing. What concerns me is that you say this has been going on for 48 days. If you were my client there would be no "wondering what to do". This issue would be have been addressed at 15 days.
My other piece of advice is that if everytime you need help you post a question on Trulia, then you need a more professional representative. We are no substitute for competent, professional, counsel.
Are you working with a Realtor? There are several things that could be causing the delay but I would hazard to guess it is probably be the financing that is causing the delay. As I said there are many things that could be causing this and if you are to continue they should be disclosed. It could be something simple such as wanting to get a better interest rateâ€¦but this is only a guess.
One thing that you might consider (here is where a good agent or attorney comes in) is the possibility that the buyer immediately release non-refundable funds. This is tricky, but done quite often. You will have to have an amendment drawn through escrow and the only way you would be responsible to refund this money is if the escrow did not close through your fault.
If the buyer(s) have locked in an interest rate and the escrow does not close by a certain date they could be in jeopardy of losing that rate. Or if docs have been drawn they could expire after a certain time. Once again, consult with your Realtor or attorney.
Jeff and Cheryl Fox
800-917-8080 Toll Free
16133 Ventura Blvd. 7th Floor
Encino, CA 91436
A question to ask is whether or not the buyer's contingencies have been removed. If yes, submit a Buyer 72-hour Notice To Perform. If the buyer does not respond in time, they could lose their deposit. This is often enough incentive to get things going. If their contingencies have NOT been removed, then you are in a bit of a pickle. Best to get your agent to do some serious digging to find out what is actually going on. Depending on your home, price, location, etc., your best bet could actually be to go back on the market. Not all markets are dropping - we are ending up in multiple offer situations on a daily basis.
Your agent should be helping you to find out what exactly is causing the delay and whether or not this is reasonable. Knowing the reason will help decide the chance of it falling apart or going through. Lenders are coming back with more and more conditions and this is making many escrows late. However, 48 days seems to be a wee bit extraordinary.
I agree with Steve that you can give a notice to perform but if the buyer can't perform and you are back to square one with your house on the market, most likely for less. I am not an attorney but my experience has shown me that it is a high burden of proof to prove the buyer was not acting in good faith and therefore have the seller receive the deposit. Review all your options with your agent/broker.