Given that the buyers cannot fulfill the agreement to close escrow for the first extension, I would wonder, as are you, if these buyers truly are "qualified." So it's time for your agent to contact the buyer's agent and the lender or mortgage broker to find out what's going on. Given that the buyers cannot complete the sale in what looks like 50 days, it's more than probable that something serious has occurred in the loan process that may jeopardize the buyer's capacity to buy. The only way to find this out for certain is for your agent to have some serious talks with the buyer's lender.
If it appears that the buyers cannot close escrow on time, it may be better to move forward with new buyers. Los Gatos is an excellent neighborhood, and if the condominium is located there, it is highly likely that both the school district and the desirability of Los Gatos will work to your benefit to sell the home. However, given that school will start soon, you may be running out of time to resell the home if you wait too much longer. To explore your options, have a frank discussion with your Realtor regarding your options. I will caveat by saying the most of the time, it works to your benefit, as the seller, NOT to restart the selling process, but if the buyers cannot consummate the sale, no amount of extensions or additional time will make this situation better--likely, the delays will harm you.
If you choose to provide the buyers with another extension, as Thom wisely pointed out below, a portion of the deposit should be made "non-refundable" to cover your losses and additional fees. If the buyers are not willing to put this money "on the line", then that may be a clear signal that they know something they're not disclosing to you. My suggestion would be to move on to a new buyer unless these buyers can prove that they'll complete the transaction on time or will pay you for inconvenience.
Grace Morioka, SRES
Area Pro Realty
Tel (408) 426-1616
It's a difficult fact to accept, but sometimes, there's just nothing you can do. That will help, I mean. Of course, your agent can scream and kick and cajole and whine and threaten, but agents can't force the lender to cough up the dough.
If you hadn't accepted this offer, do you think you would have gotten a better offer that would have closed already?
Those were tough times and can sympathize with your frustration.
The market has changed.
Single Family Home Trends:
http://tinyurl.com/835kgrf [Open in new window]
Sometimes a delay can be a "no fault" problem - not the fault of the buyers, the buyer's agent, the seller or the seller's agent. At other times, the delay can be the result of "default" (link below will explain about defaults).
If the buyer's bank cannot close on time, is it because the buyer did not submit completed loan papers on time? Did the buyers fail to sell stocks or bonds to provide the downpayment? If it's something like this, it may be a default (and if you used the PRDS contract, which is common in Los Gatos, you might be able to have the buyer pay for the costs of the extra days)
If the bank cannot perform on time for another reason which is out of the buyer's control - like you need flood insurance but there's a problem with the federal government's contract with the flood insurance provider - it may not be anyone's fault, it may not be anyone's "default". In that case, you may well have to just absorb the cost of the delays.
Very few condos are selling in Los Gatos right now, so the agent is correct in saying you are lucky to have a willing and able buyer. In Los Gatos right now there are 53 condos or townhomes for sale and only 9 closed escrow in the last month (so a 5.8 month supply of inventory). In 95030 it's a little better with 6 on the market and 2 having closed escrow in the last month (so 3 months of inventory). But not all homes are selling.
Hang in there - try to find out WHY there is a delay. Only then can you figure out what can be done to rectify it.
This may be the cause your buyers are running into this situation.
Do you want this to close with these buyers? You can offer to agree to an extension provided that the buyers cover certain expenses. Is the difference really $3000? As the difference in closing on the loan is interest not your full payment amount for the difference between July 2nd and July 21st. So you have 19 more days of expenses. Your title officer and/or agent will be able to calculate the difference.
You might also ask for a copy of the conditional loan approval from the buyer to see what conditions are required to close. Also, don't be surprised that lenders are pulling credit reports just before closing and even a charge at the grocery store can change their ratios.
The buyer is probably as frustrated as you. All parties want this to close.
When these things happen it is frustrating, but often times are circumstances beyond the agents, lender, buyer and seller's control. The patience and creativity of all parties will result in a successful closing.
I suggest you communicate with your agent and focus on the ultimate goal you want to see.
It is so frustrating when a transaction doesn't close on time but what is the real reason it is not closing. Is the buyer having difficulty with their loan and did they have to change lenders? Is the transaction REALLY going to close? Have the buyers removed their contingencies?
If the buyers have not removed their contingencies, I would have a chat with your agent and ask that they remove ALL of their contingencies. If they won't, ask the buyer to deposit additional funds into escrow and make it all non-refundable (to keep the deal going - make them have real skin in the game)
As for recovering your costs from the agents, unless they did something to cause the transaction not to close as planned I think it's inappropriate to ask them to pay your expenses. If the transaction closed early, would you have given the agents a bonus?
I think it's terrific that the agent offered something to help you out because by contract, they are due their total commission.
Best of luck,
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END a Transaction in our Brokerage. It is never beneficial to the Seller or to the Buyer and it is only beneficial to the Agent.
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