Tuesday, December 13, 2016

First Buyer Escrow to Crash & Burn & More!

I've been at this for almost 15 years. I had two of my buyers withdraw their offers within 24 hours of acceptance years ago. I had a buyer cancel on my Seller once, after they had removed all their contingencies, long time ago on that one too. Yes, Seller kept the buyers deposit, that was part of the contract.

Last week, one of my clients had their lender fail in their duties to provide the loan they had pre-approved them for. Very late in the escrow....but, before my clients had removed their loan contingency.

It wasn't one of my preferred lenders, it was an on-line lender. Ugh. Last time I worked with one of those it was a challenge, but with a lot of pestering, we got it done. So, I told my clients I was up for the challenge!

The pre-approval seemed aok. They were just finishing up a refi, the lender had all their income documentation for that, right? I sure thought they did. Then, on the purchase, just before we should have been removing final contingencies...lender threw a wrench in the works & said we had to change loan programs to make this work.

Long story short, it did not work. 
So, Crash & Burn.....

Quite honestly, that's not the point of this post. The listing agent.....and the sellers selected escrow....that's the point. And, it's something a prospective Seller needs to be completely aware of.

So, here is the guts ~

1) Escrow was not contingent upon the Seller getting a replacement property. During the inspection, Seller told us she was moving out of state and, if my memory serves me, buying some land to build a home. Nice. Good for her, right? 

2) HOA Documents are in the contract as whomever is supposed to pay any upfront fee, does it within a specified time period. Well, the Seller didn't, her escrow company fronted the 500+ smackers to order the docs.

3) Listing agent did not follow the time lines in the contract....for our contingency removal. 

4) Seller apparently put a non-refundable deposit on an apartment and airline ticket....before we removed all our contingencies.

5) Now, since we crashed & singed, listing agents preferred lender tried to see if he could make it happen. Yesterday we found out he could not due to the amount of cash needed to close in his formula...so complete burn on this escrow.

The finale? Seller signed our contract cancellation instructions, escrow let us know about the fact that they paid the upfront fee, seller is apparently losing a few k cash, and my buyers deposit is being held until we get to some resolution of the HOA upfront doc fee. 

So, prospective Sellers? Hire an agent that follows the contract & monitors the buyers contingency removals. Don't put up moolah on something else unless you know you're in a sure thing. Select an escrow that follows a contract as well.

Waiting for a finish, but as a courtesy, I've offered to pay 1/2 the fee......and, now....I'm doing my favorite thing....waiting for this to get squared away. I'm going to call the escrow company as soon as I finish publishing this to light a fire under their butts.

Can I get a 'Good Luck'?

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