Home Buying in San Jose>Question Details

Kevin, Home Buyer in San Jose, CA

What are my options if the property I'm buying does not close on time, this is a cash transaction, bank repo?

Asked by Kevin, San Jose, CA Sun Jan 18, 2009

Can I cancel the transaction? My security deposit? Cannot I collect on any type of loss fees(interest).

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Answers

7
That depends on who is dragging his feet. Bank? Buying agent not getting back to you? or buyer?
Bank is not too excited about repair as they all stated "AS IS". The buyer should have done all his repair estimate and offered a price including the repair at the time of submitting an offer. If it involves a 3rd party like HOA etc. then your agent needs to do what it takes to get it signed.

Check your contract and have your agent contact buying agent. Most contract probably says something to the affect buyer will be charged an interest if buyer does not perfrom.
0 votes Thank Flag Link Fri Jan 23, 2009
Kevin,

In my opinion you have three options:

1) Accept - ok, you're gonna be late. We'll hang in there.
2) Reject - It's an acceptable time to walk away. We send a notice to perform, give notice, walk.
3) Counter - I'm sorry Mr Bank Sir. I know you're taking it in the shorts but so am I. I can only hang in there if ____ ( you fill in the blank).

The fun thing about real estate is that we all do it a little differently.

Sometimes you have to fight for your deposit - hope you have a rockin agent!
You can't "sue them" or collect damages but, you can walk and I bet they are hoping to keep you in the deal.

This is when your agent becomes your best friend!

Good Luck!

R
0 votes Thank Flag Link Sun Jan 18, 2009
Kevin -

If you are having second thoughts about the purchase and are looking for a way out, you will need to study your contract thoroughly to see if there is a escape route that does not jeopardize your deposit or place you at risk for legal action/costs.

If you are the reason that the escrow is not closing on time you could be subject to a per diem charge. This will be indicated in your contract or more specifically the addendum sent by the seller. If the seller is the one that is late, the situation would have to be significant enough that you want to see mediation/arbitration/legal representation to prove your loss. I agree with others to start a paper trail when dates have been ignored without good reason/mutual agreement.

Closing on time with an REO is not as common as we would all like. If it is a "reasonable" time period and all involved are working in good faith it is better to simply stay on path and close the deal. It my experience it is repair issues or finance issues that tend to delay the contract. However, with some distant corporate owners, it can simply be the transaction process seems to take twice as long ( or longer ) than anyone expects.

As others have posted, review your contract closely with your agent. Ask their advice for the best way to manage your particular situation.

CJ
Web Reference: http://www.TalkToCJ.com
0 votes Thank Flag Link Sun Jan 18, 2009
Kevin:
This is one of the frustrations involved with buying a bank REO or a short sale property.
The question is:
Do you still want to buy the property at the agreed upon price?
If so, there is little you can do other than be patient.
If you no longer want to buy the property then you can try to cancel the contract and get your deposit back.
My sense is that you still want to buy the property.
If so, my advice just sit tight and wait.

Do you have an agent?

These are really the kinds of questions your agent should help you with.
0 votes Thank Flag Link Sun Jan 18, 2009
In all of the bank owned properties where I've represented the Buyer, the banks have an extremely long escrow and many have not closed on time. This is not uncommon. The bank/seller usually has some sort of clause that addresses that issue in their contract addendums. Usually a per diem if the Buyer closes late but no penalty if they do. It depends on what you agreed to in the contract. Have your real estate agent explain the contract to you and analyze your options. I am curious why you would want to cancel instead of wait for them to close.
0 votes Thank Flag Link Sun Jan 18, 2009
Kevin,
Your options a quite simply whatever it says in your contract. That is after all the reasons we use contracts. If you are buying through a Realtor then he/she had better be able to answer any questions you have. If you are buying on your own then the best source of useful info is from an attorney.
Bill
0 votes Thank Flag Link Sun Jan 18, 2009
If the bank cannot close by the agreed to date, you need to have your agent send them a notice to perform. It's customary to give them 3 days to close and then if they don't, you can cancel the escrow. Because they are in breach, you can get your entire deposit back and I would ask them to reimburse you for all your costs, including inspections. You do need to read the fine print on what you signed, banks normally have clauses to protect them for just this situation...but depending on how delayed they are, you might still win in a small claims suit, assuming they would even bother to fight you.

hope this helps..talk to your agent, he/she will give you direction.

Karen
0 votes Thank Flag Link Sun Jan 18, 2009
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