[QUOTE=Mud Flinger;1103669]I've never heard of a delay on earnest money. I've always had it with the offer. I also would expect the financing to be figured out before hand, otherwise the deal could go south quickly. Good luck. Stressful times.[/QUOTE]They have 17 days from when we opened escrow to put up the money. I can understand that they wanted to do a thorough inspection so they know what they are getting into. Also the financing is dependent on the appraisal that is going to be done tomorrow. The bank will only loan on appraised value. If that is lower than the agreed upon price, they are going to have to come up with the difference somehow. I found an old appraisal from 2008 that I had done back when the market was really crappy and back then it was officially worth $865,000. Since then I have added a bathroom to it and the market has picked up so I am pretty confident that the appraisal will end up being not too far under the price we agreed on of $910.
[QUOTE=Kymma;1103707]Are you an Aries Amazon?
Fingers crossed that everything goes smoothly![/QUOTE]No, I'm a Pisces Amazon. March 14. Thank you. It's hard to wait but I really have no choice.
OK, now I am doing some mild freaking out. The appraiser who was supposed to come today called my broker to say he wasn't going to be here. She and I both interpreted this to mean that he had a scheduling conflict or the flu and needed to reschedule the appointment. So I called him to do that and he told me that he has been told by the lender (who is the one who pays him) to "put the appraisal on hold" for the time being. They didn't tell him why and he really didn't ask as it's not his concern.
Crap. Hopefully the buyers' financing is not falling through. Waiting is so tedious.
yes, waiting is the hardest part.
like, immigration still has our passports and we don't have an officer even looking at our paperwork yet and no sense of when that's going to be. Apparently, we are allowed to stay in the country until they process it yay or nay. And if nay, then we have something like 90 days to tie up and leave. Thanks, Immigration! ack!
Anyway, we are going on the assumption that we'll be fine since our business is profitable and continuing to grow. And we pay our taxes.
So, yeah, I know the feeling. I also feel naked without my primary ID.
Yes, it's nerve-wracking all that waiting and not-knowing while waiting!
Also the question arises that, if this deal should fall through, do I go ahead with moving into The Perfect Apartment or not?
There was a law passed in California back in the 70s called Proposition 13 which said that property tax rates could not be raised for existing owners and that Prop 13 rate transfers from parent to child so I still have my parents' absurdly low tax rates on the house. So it doesn't cost me much to stay here unless there are maintenance things which do come up. OTOH, it is not really where I want to be.
I think I may just move in any case and let the realtors sell it vacant with a lockbox. There was the other offer on the table at $20k less but I wonder if they would still be interested.
Grrr. I just want to know what is going on.
Yes, thats' the main thing. The nice thing is that you might be able to find other offers very quickly, which is beneficial.
This sounds like a very strange deal. I was a R.E. Broker years ago in CA, the rules can't have changed all that much.
1. You agreed to wait for the earnest money deposit until all these tests were done. That was done with very bad advice. Typically the earnest money is put into escrow when it opens, which is when a purchase contract is accepted.
2. Since you agreed, in the purchase contract, you'll just have to wait until March 17th.
3. When does you listing contract end? You have to stay with the same broker until then.
4. I would NOT move out until the house is in escrow, the earnest money included and the required tests are passed and accepted. You should have a report on each of the tests from your broker. Nowadays, in CA, lots of escrows do not close successfully. IF it does not close successfully, be sure, even if you have to go to court, that the buyer releases and closes that escrow. Otherwise you will not have clear title to sell in the future.
5. You said the prior appraisal was in 2008. Prices didn't start to fall until October 2008 in CA, and they fell for 1.5 years and then some. Your broker / salesman must have also given you a sales estimate on your house. How much was that. There should not be any significant difference in appraisal between your broker and any bank unless one of the tests has failed and there's considerable expense expected in repairs. You can hire a certified appraiser youself if you want a good, realistic price or if you want to contest the bank's appraisal.
6. Prop 13 isn't affected by your simple non-occupance. Title must be transfered to affect that.
Be warned that courts in CA are going to side with the buyer, especially with a house of that value. Go over any contracts that you are going to sign word for word, alone. Ask you broker to clearly explain anything you do not understand.
I appreciate all your advice and expertise in this matter.
It's 17 days into escrow that they have to do the tests and get their financing together. That puts the earnest money actually in my hands if they flake on March 5. I have gotten the Perfect Apartment building to extend my hold on it until the 6th. The money is in the escrow account but it has to be refunded if things fall through. I really didn't understand that at the time I signed things but then I never thought anything could fall through so I never really asked too many questions. And I really don't know how standard a way of doing things or not this is. My brokers acted like it was totally normal and expected.
Why do you advise staying put here?
Yes, I do want copies of all the reports. Note to self..
Good advice about making sure any unsuccessful escrows are closed out and off the books.
The prior appraisal was late in 2008. Things were already headed downward. That one was 8.65 and I have added a bathroom since then.
The brokers gave me an estimate of what they though we could ask. They said we should ask for 9, be prepared to dicker down to 8.5 and then I would walk away with 8 after all the fees and commissions. So even if I have to settle for the second offer that got rejected at 8.9, I am still doing pretty well.
Hi Paleobird, I did read back 4-5 pages twice to be sure I understood the agreement you made, but perhaps I still got it wrong becuase you now seem to be saying something different.
Is the $27,000 earnest money already in escrow? When was it put in?
Standard is that the earnest money is put in escrow when escrow opens. If escrow does not close due to fault of the buyer, you get the earnest money. If escrow does not close due to fault of the seller or of the house, the buyer gets their earnest money back. The remaining full price of the sale is put in escrow 1-2 days before the close of escrow. The typical earnest money deposit used to be %10. That may now be %6-7. But %3 seems pretty low.
If the earnest money is not put in escrow until after the tests on the house are done and anything or anyone flakes, there is nothing for you to get.
But here is how I understand you now. Earnest money is in escrow. House tests are being paid for by the buyer must be done by the 17th and financing (a bank loan) must be completed arrangements by the buyer by the 17th. (Well that can't be right or it would be a 17 day escrow.) How long is escrow anyway?
Before the 80's very few escrows fell through. Now lots and lots of them do.
Before the 80's it was safe to leave a house in escrow unoccupied but not today. It is not at all uncommon for the buyers or even people unconnected with the sale, maybe especially them, to simply move in and 'squat'. Even with an attorney it can take a year to get them out, and of course escrow cannot close because possession could not be given, and you have no sale.
It sounds like your house was very reasonably priced.
Did your house pass all the tests it was given?
If so, the only reason I can think of that the bank would no longer want their appraiser to go to the property and make an appraisal for them would be that the buyers could not qualify for the loan with that bank.
And yes, all experienced brokers take a pessimistic attitude (LOL) towards escrow so as to make very sure that everything gets done correctly and on time. The things that can go wrong are amazing. I once had a buyer sign a purchase agreement in my office but had to go to a prison to have him sign the escrow papers.
The earnest money IS in the escrow account but there are two reasons it could be refunded referred to I think as "contingencies".
1)the buyers aren't happy with the results of any of the inspections
2)the buyers can't get their financing in order
They have 17 days which end on March 5 then the contingencies are removed and it becomes non refundable. I think the complete escrow is about a month.
I wouldn't have a problem with anybody squatting in my house because I know all of my neighbors and they wouldn't let that happen.
There was some concern about a crack in a wall in my Dad's shop. The lady of the buyer couple insisted on calling in a soils engineer expert to try to tell her what was going on with that but he couldn't give her a definitive answer short of taking the wall apart to see and that really isn't an option seeing as how I still own the wall. He told her that the crack was minor and cosmetic as opposed to structural but she just wasn't happy so she called in yet another soils engineer who proceeded to tell her the exact same thing. She may just be getting cold feet and looking for a reason to bail. I don't know. Otherwise there are some minor things like a couple of electrical plates that need some screws but nothing major.
Paleobird, sorry to hear about the hassle. Cold footed buyers make me crazy. But then just as you're going to go out and beat up an inanimate object with a baseball bat, in walks a buyer who needs exactly what your home has to offer.
My vote is to move into the apt you like. You got a couple of offers, so it's not like it's an undesirable house. Even if this deal falls through, you'll most likely sell fairly soon. If you can swing the rent on the apt, and any small things that might be needed at the house while it's empty, go for the apt you like. OTOH, if your realtor gives you even an inkling that the two offers were flukes, and it might take a long while to sell, you might want to reconsider.
Do what makes you happy and lets you sleep at night. :)