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Answers (15)
- Naima Sumner, "Dallas Ft. Worth PRO"
- Contributions:2847
At this point, you should not terminate. You will lose the earnest money if you close or not. So I would ride it out, stay on top of your lender and hope that it closes on time. You never know, the owner may change his mind when closing time come around.
Naima
Naima
- Don Groff, "Austin Texas Realtor"
- Contributions:355
I agree with many of the comments below. I would have either stricken out those words in the special provisions and if they did not agree I would have advised my client to walk away. I am a mortgage broker and Realtor so it is possible to get loans done in as quick as 19 or 20 days but that is pushing it and because we are now in the "holiday season" that timeline is just about impossible to meet in November and December.
If the contract was being negotiated and there was a stronger backup offer at the same time the seller's would have just went with that offer to begin with so I doubt their intention is to go with another offer after keeping your earnest money for non-performance.
Here is what you should do... have your agent speak with the seller's agent and ask why they are wanting this verbiage in the contract. This is a buyer's market so there will always be another property out there for you. You need to know if they truly want to sell the property to you and if so why can't you have another week or two to ensure your financing is taken care of. If you or your agent do not get a good feeling about the seller's intent than it is bet to just walk away. Like I mentioned, there is always going to be another property out there for you.
Best of luck to you.
If the contract was being negotiated and there was a stronger backup offer at the same time the seller's would have just went with that offer to begin with so I doubt their intention is to go with another offer after keeping your earnest money for non-performance.
Here is what you should do... have your agent speak with the seller's agent and ask why they are wanting this verbiage in the contract. This is a buyer's market so there will always be another property out there for you. You need to know if they truly want to sell the property to you and if so why can't you have another week or two to ensure your financing is taken care of. If you or your agent do not get a good feeling about the seller's intent than it is bet to just walk away. Like I mentioned, there is always going to be another property out there for you.
Best of luck to you.
- sunnyview
- Contributions:25139
I understand that you really want the house, but I think that assuming that you can close in 20 days is dangerous as you have already gathered. You can try to negotiate are more typical escrow period, but if you can't then
I think you may have to let this one go unless you want to take the risk. If it were me, I wouldn't do it with this seller in this market. Anything turned up by your inspections will blow your time line and I would be concerned that the seller would not agree to reasonable concessions if they want to choose another offer already.
I think you may have to let this one go unless you want to take the risk. If it were me, I wouldn't do it with this seller in this market. Anything turned up by your inspections will blow your time line and I would be concerned that the seller would not agree to reasonable concessions if they want to choose another offer already.
- myivy2
- Contributions:4
thank you all for the hearty suggestions!
We wanted to have this changed but the seller/agent didn't agree. It looks like, they wanted to have us quit so they can sell it to the backup offer, which we guess may be higher than ours.
We are in a dilemna. We want the house, have contacted lender to speek up. but nobody can gaurantee bank will have the loan ready and appraisal in the right amount in the 20 days.
Should we take the risk? or any other solutions?
Much appreciated!
We wanted to have this changed but the seller/agent didn't agree. It looks like, they wanted to have us quit so they can sell it to the backup offer, which we guess may be higher than ours.
We are in a dilemna. We want the house, have contacted lender to speek up. but nobody can gaurantee bank will have the loan ready and appraisal in the right amount in the 20 days.
Should we take the risk? or any other solutions?
Much appreciated!
- Holly VanCourt, "HollyVanCourt"
- Contributions:11
I agree, this does sound like language from a bank document. Can you ask your agent to draft an addendum that the EMD can be returned if you do not close and they are unwilling to extend?
- Thomas Brewer, "ReMax Top Producer"
- Contributions:28
The verbiage in itself is very unusual to have in a contract. That being said the delay scenario on the loan will most likely not terminate the transaction. The seller would be out the time and trouble to obtain another buyer in the holiday season. That scenario is not appealing to the other side. I would however contact your lender and explain the situation and see if they can "bump" the file to ensure the transaction closes on time. Please go to [hotlink removed by Zillow moderator] for more info.
- John Crowe, "CroweHomes"
- Contributions:118
While it doesn't help now, it's a good lesson for others - make certain you understand the documents you sign and the milestones required to meet deadlines along the way. Based on what you wrote, you have a 10 day option and offered to close in 20 days. If it's a cash deal, no problem - you could close on the 11th day. If a lender is involved, the issue becomes sizable: Lenders aren't going to get the ball rolling on processing/underwriting until the deal is beyond the option period.
I think you should contact a real estate attorney immediately and determine all options.
Good luck!
I think you should contact a real estate attorney immediately and determine all options.
Good luck!
- Naima Sumner, "Dallas Ft. Worth PRO"
- Contributions:2847
What you signed basically says that even if it's the seller's fault, they get to keep your earnest money and option fee.
I hope for your sake that it's not a lot of money. Seller may have been burned with previous offers where they had to take the house off the market while waiting for buyer's financing and it didn't close, so they played it safe with you. It sounds like you are not working with a buyer's agent, no way would one agree to such clause without having a protection for the buyer.
On the other hand, the seller may reconsider if there is a delay for a day or 2 because the other buyers would have to do inspection, appraisal etc. basically starting over.
Good luck,
Naima
I hope for your sake that it's not a lot of money. Seller may have been burned with previous offers where they had to take the house off the market while waiting for buyer's financing and it didn't close, so they played it safe with you. It sounds like you are not working with a buyer's agent, no way would one agree to such clause without having a protection for the buyer.
On the other hand, the seller may reconsider if there is a delay for a day or 2 because the other buyers would have to do inspection, appraisal etc. basically starting over.
Good luck,
Naima
- Hamp Yonce, "Zilluminati"
- Contributions:3463
I would love to see the look on a Texas judge's face, when hearing your suit against the Agent who let you sign this contract. The addendum sort of bastardizes the term "earnest money".
- Guy Gimenez, "Broker and Investor"
- Contributions:58
You are likely going to lose your earnest money in the event you don't close on time and you haven't otherwise terminated as provided for in your contract. The seller can retain the earnest money because you agreed to allow such when you signed the contract. If you have an agent working for you and he/she didn't explain that to you prior to your execution of the contract, shame on him/her.
- myivy2
- Contributions:4
my agent did talk to the seller and they won't agree to give us an extension, and seems like the back up offer is higher than ours, maybe they want to take our earnest money and take the back up offer
- Michael Emery, "MikeEmery"
- Contributions:7298
Well that would be great language to put into a contract....if this were a sellers market. Otherwise, not so much.
Talk to your lender to ensure that you will be able to close within the time frame. While there's no guarantee, it would help to minimize the chance of losing your earnest money.
Talk to your lender to ensure that you will be able to close within the time frame. While there's no guarantee, it would help to minimize the chance of losing your earnest money.
- ConnieK_Oklahoma
- Contributions:2899
Ask you agent to get an extension on that closing date due to time needed for your lender. You can get them to agree. Do it now and you can get the per deim waived. If your agent and the listing agent are unsure call the title company and have your agent call them because they have seen if before with that seller and can advise on it. I have extended over 45 days due to loan hold ups on an Reo and the penalty should have been 100 per day but it was waived because we took care of it in advance
- myivy2
- Contributions:4
this is not a bank owned property, seems like the seller has a back up offer and want to rush us.
- Michael Emery, "MikeEmery"
- Contributions:7298
This sounds like language in a bank owned purchase agreement.
Is there any additional language regarding the penalty if you miss the closing date? (typically called a per diem penalty).
If you're unable to close due to being unable to receive financing, it appears that the language says they reserve the right to retain your earnest money. If closing is delayed (due to your fault) the per diem penalty would come into play until you are able to close. In either event you are being penalized by either closing late or not being able to close at all.
If this is a bank owned transaction, it is very common for them to include addendums that will supersede the language in a typical state purchase agreement. The contracts in these kind of transactions always benefit the seller with the buyer getting the benefit of paying less for the home.
Is there any additional language regarding the penalty if you miss the closing date? (typically called a per diem penalty).
If you're unable to close due to being unable to receive financing, it appears that the language says they reserve the right to retain your earnest money. If closing is delayed (due to your fault) the per diem penalty would come into play until you are able to close. In either event you are being penalized by either closing late or not being able to close at all.
If this is a bank owned transaction, it is very common for them to include addendums that will supersede the language in a typical state purchase agreement. The contracts in these kind of transactions always benefit the seller with the buyer getting the benefit of paying less for the home.
earnest money question
what exactly does this mean? because the closing date is in 20 days, what if we delay the closing date due to loan issue nothing we can do, can the seller take the earnest money?
appreciate you advice.
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