Escrow close date in 3 days, still haven't heard back from the bank on repairs?

Asked by Ariadragonfly, 94519 Fri Feb 25, 2011

Our loan is contingent on fixing two windows with cracks in them, and 1k termite repairs. Since this a bank owned property we are stuck in the chicken and the egg problem, those things need to be done, the bank probably wont do it, but we don't own the home yet so we can't waltz in and do stuff to a house we don't own. We are fine with spending the money and fixing it if the bank will let us, but its been over 10 days since we requested this and they haven't gotten back to us at all. We are supposed to close by the 28th but that is obviously not happening. Does anyone know what we can do?
We can't walk away from this property, it's taken nearly 7 months and 20 other offers to get accepted on a home (since we are conventional and not cash) and its a great place with a ton of potential in a nice neighborhood.

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18
Tina Lam, Agent, San Jose, CA
Fri Feb 25, 2011
Even in regular sale, most sellers won't let buyer come into the house and do repair before the close of escrow. And I would recommend my buyers not to make such a request to too because it incurs unnecessary liability on the buyers' behalf. What if you go and repair and end up breaking other things? What if you repair it and then the deal falls through? Do you expect the seller to reimburse you?

When the bank / seller hasn't responded, effectively they declined your request. You can of course pursue this. You can request a "notice to perform". It means if the other party doesn't do it, you are going to cancel the contract. Are you willing to cancel the contract just because you can't get into the house to do the repair earlier?
Web Reference:  http://www.archershomes.com
1 vote
Laura Coffey, Agent, Santa Clarita, CA
Sat Feb 26, 2011
If you submitted a "request for repairs" and the bank says no no don't give up yet. Sometimes the bank will allow you to use lisenced controtrs and your expense if they sign a liability waiver. I had this situation with a VA buyer and we finally got the bank to allow the items fixed at the buyer's expense. Keep in mind this will be a risk to you if for some reason the deal doesn't close.
Another option would be to see if the lender would allow you to hire the correct professionals before close, get estimates, place the money in escrow to have the repairs done as soon as escrow closes so they know the work will be done.
The loan you are gettin does sound strict though. Many times my lender can get away with a termite waiver and window repairs are no longer an issue for FHA in most cases so I'm not sure what's going on.
I wish you the best of luck.
0 votes
Heather Wrig…, Agent, The Dalles, OR
Sat Feb 26, 2011
Ugh! How frustrating and very common. First sounds like you need to extend the closing date. Its getting to close for comfort. What you can do is get bids for the repairs work. If their is room between the offer price and appraised value then you can add the repair cost to the offer price and ask that they do the repairs. At that point your paying for them and they are doing them before closing. Hope that is an option for you. I recently had a client in the same position as you!
Good Luck!
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Sat Feb 26, 2011
Hello,

I couldnt agree with Craig more. Just would like to ask if you are working with the selling agent or if you have your own agent. You have to remember the sellers agent, while they CAN represent you as a buyer, their interest lies in the seller's best interest. Make sure you are doing what's best for you, the repairs you need to complete seem insignificant to the home you are getting (that's just my honest opinion), but it's your choice and you should discuss all options with your agent. Good luck :)
0 votes
Craig Lawler, Agent, Concord, CA
Sat Feb 26, 2011
You say "the bank probably won't do it" when referring to the repairs. Does that mean your agent submitted a request for repairs, but the bank did not answer back yet? (no answer back means no, until you hear otherwise in the affirmative).

If the bank did not agree to any of the repairs (which is typical since they rarely do), then as others have said here you must do the repairs yourself. Your agent should have submitted a request to the bank to allow you to make the repairs in order to fund the loan (the bank usually has you sign a hold harmless form which releases them from liability AND says if the transaction does not close, they will not reimburse you and they get to keep the repairs - so there is some risk involved here). It sounds like these are "lender required repairs", which means your loan won't fund until the repairs are complete and certified as having been completed by the appraiser (usually seen on FHA loans...not so much on conventional loans).

In these situations, we've had the buyer pay to have the repairs completed just before the closing date. Because you are spending your money on a house that you do not technically own, you want to make sure you've removed your inspection contingency, removed your appraisal contingency and your loan is certain to fund (pending the repairs), so you and your agent are confident you will close escrow.

Ultimately it's your decision since it's your money, but I've seen most buyers will just get in there and get the repairs done, have the appraiser certify they have been completed and get the loan funded so you can close. Be sure to have your agent request an extension on the closing date, or the bank could technically cancel the contract or charge you a per diem fee for every day past the closing date.

Get together with you agent and discuss how to proceed.


Craig Lawler, REALTOR
Security Pacific Real Estate
0 votes
Bernard Gibb…, Agent, Danville, CA
Sat Feb 26, 2011
It sounds like you need a different loan product. As it is a bank owned home, it sounds like all contingencies have been removed (passive contingency removal with an REO) and the bank has effectively declined your offer.

Where is your buyer agent? You are at risk of losing your deposit here!

Bernard Gibbons

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Phone (925) 997-1585 - bernard@bernardgibbons.com

http://www.BernardGibbons.com
0 votes
Maxine Chan, , Martinez, CA
Sat Feb 26, 2011
Your agent and the listing agent MUST be communicating. Assuming these repairs were negotiated in your offer and acceptance, or Request For Repairs after your home inspection, the listing agent should be able to get you an answer. At this point, request a 30-day extension for COE so the agents can take care of this. Banks have the reputation of being extremely slow, but they should prefer working things out with you rather than putting the property back on the market.
0 votes
Gilbert Rich…, , Santa Clara County, CA
Sat Feb 26, 2011
Check if your lender will allow an escrow holdback from the repairs. I am dealing with the same situation where a seller promised to do repairs and ran out of money.

That might be the easiest way.
0 votes
Adrian Hunti…, Agent, SAN FRANCISCO, CA
Fri Feb 25, 2011
Which Bank is it? Sometimes you can get the Bank to Allow Repairs, if the repairs are completed by one of their approved Vendors. They will also make you sign a Hold Harmless Clause. If you need help let me know.
0 votes
Pacita Dimac…, Agent, Oakland, CA
Fri Feb 25, 2011
.When you found out what repairs needed to be done -- did you communicate these to the agent and his/her asset manager via Request for Repairs? Depending on the bank, and depending on the extent of the work, some bank MAY agree to repairs particularly if you identify these repairs as safety and hazard issues.

I've closed escrows on REOs where one bank paid to demolish a leaning garage that posed a severe safety hazard, another bank replaced broken doors and windows also considered safety hazards. In another situation, te bank put in a stove (where one was missing) so that the kitchen was considered "functional" to get through the appraisal.

Hopefully your agent is following up.....it may not be a bad idea to also get an extension contingent on the completion of such repairs.
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Feb 25, 2011
Where is your buyers agent. Bank typically do not do repairs either close and repair issues yourself.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Ariadragonfly, Home Buyer, 94519
Fri Feb 25, 2011
the contract is still contingent on the loan, and we are not FHA we are Conventional 20% down. They did not agree to repairs, and we have no problem paying for them as we were expecting to do them afterwords (in fact before they told us we HAD to fix the cracked windows we already had an estimate from someone to replace ALL the windows) The only major problem is that they are making us do it before they will draft the loan documents and the bank wont get back to us.
0 votes
Sindy Verdugo, Agent, Long Beach, CA
Fri Feb 25, 2011
Hire a contractor to go in and do the work if you want the house. Pay the contractor and be done with it. Are you willing to lose the house over less than 2k in repairs? Contact the lender directly if your agent won't act. Find out from the termite company how soon you can get a completion. Call your lender and give him a date. Take control.

If you don't want the house, that is another story, this is a good way to lose it.
0 votes
Sindy Verdugo, Agent, Long Beach, CA
Fri Feb 25, 2011
Call a termite company to come in and do the work and bill escrow.

The escrow company will put a request into the bank to pay the bill.

Worse comes to worse you can pay the bill yourself and go after the back for a refund.

Did your purchase contract ask for the seller to do any work or did you buy it as is?

If you bought it as is and the lender never agreed to do the work, I would do the work myself and get the deal closed. I am sure the property is vacant.

Do the work, get the loan closed get your house and work on getting the money back if your contract said the bank would do it. If you contract says as is. Pay for the repairs yourself.
Web Reference:  http://www.SindyVerdugo.com
0 votes
Vickie Nagy, Agent, San Ramon, CA
Fri Feb 25, 2011
Hello Ariadragonfly,

I am concerned that your contingency period has ended, per the terms of your agreement. An unacknowledged request for repairs on a bank-owned property tells me that they didn't agree to do the repairs. It sounds to me as if you are using an FHA loan to buy a property that needs work, and the bank did not agree to the work.

Hope it all gets worked out. Banks don't like to delay closings, but it sounds as if you need a different loan product.

Respectfully,
Vickie Nagy
0 votes
Ariadragonfly, Home Buyer, 94519
Fri Feb 25, 2011
Yes that is what we want to do, have a licensed professional come in and do the work, but the bank wont tell us if we can do this or not, our agent isn't really saying much, I am on the fence if I have much faith in him knowing what is going on.
0 votes
Ariadragonfly, Home Buyer, 94519
Fri Feb 25, 2011
The loan is contingent on these things being fixed before the close of escrow so if we can't go in and do this we can't get the property, the loan officer is basically saying they can't even draw up the loan documents until the repairs are done. We have already tried to bundle money into escrow for repairs or draw up documents expressly stating that we will fix these things asap after closing but the loan officer is saying that will not work, that the problems must be fixed before escrow closes, for whatever reason.
0 votes
Linda Urbick, Agent, Blackhawk, SD
Fri Feb 25, 2011
Have you thought about hiring a licensed contractor to make the repairs, that is what generally is required whether the buyer or the seller is making the repairs. Your agent can supervise the work and give access to the contractor. What advice has your agent given you?
Web Reference:  http://www.homesalespros.com
0 votes
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