Mrsmcghee, Home Buyer in Martinez, GA

Today ended our 14 day 'due diligence' period, we paid our earnest money and basically thought we were all

Asked by Mrsmcghee, Martinez, GA Thu May 28, 2009

set to close on June 11th. That is until we called our lender to let him know the final pricing and all, he tells us 'business has picked up and it has been taking 3 weeks to get closings completed', basically saying we need to extend our closing to the 18th. Does this put our earnest money at rick because we are no longer closing on the 11th?

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Mrsmcghee, Home Buyer, Martinez, GA
Sat May 30, 2009
After re-reading our contract I felt much more at ease about the possible extension. We are still unsure if we will need it but we do plan on calling our lender next week to 'gently encourage' him to hurry along. With this being our first home it's over whelming all the different steps we have to go though. We do have an agent who is representing us, we tried to go into this as prepared as possible. We saved our money, managed our credit scores to make sure everything was correct, researched everything we could about different types of loans and all the fees associated with home buying. We did everything 'right' down to hiring the best inspectors we could find. I just never thought to consider the lender stalling the process, someone should write a book on all the 'what ifs' involved in buying a home!
0 votes
James Dudley, Agent, Suwanee, GA
Sat May 30, 2009
You have the unilateral and the seller should be willing to work with you on the closing date.

Good luck!!
0 votes
Joe Loomer, Agent, Augusta, GA
Fri May 29, 2009
Mrs. Mcghee,

Did you have a Financing Contingency Exhibit, an Appraisal Contingency Exhibit, and (if required) a VA or FHA loan addendum?

The first - the Financing Contingency - provides you with additional rights, and is a required exhibit unless you're paying cash for the property (which you apparently are not). The Appraisal Contingency is not required, but in this market should be a no-brainer. If you're using a VA or FHA mortgage to secure the home, then the exhibits for those type of products are required in addition to the Financing Contingency Exhibit.

The Financing and Appraisal Contingencies have their own due diligence periods that may or may not be longer than the original 14 days in the Purchase and Sale Agreement.

Speak to your agent and ask for clarifcation on the delay. The Augusta Market continues at 13% below 2008 sales figures, and 2008 was down 24% on 2007 numbers - I don't know what the lender means by "business picking up" - they may be putting a higher priority on refinances vs. purchases, you need to speak to his boss. the 11th is still 10 business days away, plenty of time - and the appraisal and inital underwriting should already have been complete.

Despite the built-in seven day extension, Georgia still requires an amendment to extend the closing date.
0 votes
Clifford Glo…, , Valparaiso, IN
Thu May 28, 2009
Hopefully you are working with a Realtor whos's representing you, as you should be aware it does not cost a dime to you. As a broker/owner it is very common for many underwriting "Nightmares" as we call it whom may ask for additional time and it is very common for realtors to put in an extenstion right away, EM is typically your investment towards the purchase of your home. And the only time your EM is not returned is due to you just backing out of the contract, if for whatever reason if you fail to get the home, due to not being able to get the financing typically in this situation you can ask for a Mutual Release and ask for the EM to be returned, because basically the seller will have sympathy for you . Hope this helps you...
0 votes
David Ryan, Agent, Atlanta, GA
Thu May 28, 2009
I am glad. Just remember stay on your lender. Gentle pushing never hurts.

Enjoy your new home.

David
Web Reference:  http://www.jdavidryan.com
0 votes
Mrsmcghee, Home Buyer, Martinez, GA
Thu May 28, 2009
Thanks, you made me just 're-read' my contract and I did find a clause titles 'right to extend unilaterally the closing date', which actually gives us 7 additional days if our lender needs more time. WOW, I feel so much better now.
0 votes
David Ryan, Agent, Atlanta, GA
Thu May 28, 2009
In after thought. It will also depends on how the clause of the due diligence reads as it relates to the earnest money. I usually only but in a release of earnest money (or "go hard") in commercial transactions or homes over 2 million.
Web Reference:  http://www.jdavidryan.com
0 votes
David Ryan, Agent, Atlanta, GA
Thu May 28, 2009
Mrs McGhee: Your agent, if you have one, should be able to take care of this. An extension is very common and one that is of reasonable time should not be a problem. At this point you are only extending closing and all other terms would remain the same.
Web Reference:  http://www.jdavidryan.com
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