Saturday, November 13, 2010

Help with home buying, contingency money and escrow!?

Ok I am super stressed so please bare with me. My husband and I are buying our first home. We found one that we like. We have been pre approved for an FHA loan. This is how things have gone down. We offered the asking price of $150,000 with the stipulation that the seller pays closing costs. We gave them the $1000.00 earnest money and asked a 30 day contingency period. There counter offer was $150,000, we pay closing costs and a 12 day contingency period. They can not pay the closing costs because they owe more on the house they just need to get rid of it. The house was originally on the market for $175,000 then they dropped to $169,000 now they are at the %150,000. They said there is no way they can pay the closing costs because they are already paying the difference in what they owe. I understand this so we counter offered $156,000 (we don't have the extra cash on hand for closing) they pay closing and we get a 30 day contingency. They accepted with the stipulation being 12 days on the contingency. They say it is because they want to make sure we are serious because they need the house sold. Here are my questions since I can't speak to my agent until morning.

Is 12 days even doable?

Does that mean escrow is only 12 days?

I am just so lost!

What should we ask for?

I know are agent can answer all of these questions for us but I am just losing my mind and would like some opinions

If it helps we are in california.

Thanks for any help! I just don't understand any of it.Help with home buying, contingency money and escrow!?
California real estate is different than other states.



The contingency period is the time you that your earnest money deposit is refundable. During your contingency period you should be doing an inspection of the property, getting final approval for your loan (or get to the point in your loan process that you feel confident you will be able to qualify for and be able to close the loan), have the appraisal done, review the HOA documents and make sure you agree with them (if the house is in an HOA), review the title report, review the natural hazard report (to see if the house is in an earthquake zone or a flood zone), etc.



You do NOT need to close escrow within your contingency period. When your contingency period expires then you will be expected to remove your contingencies which makes your earnest money deposit NONREFUNDABLE.



The standard contingency period on the form (put out by the CA Association of Realtors) most often used by agents is 17 days. 12 days is totally doable (as long as you schedule your inspection quickly and your loan person is on top of things).



I hope this all make sense. Your agent will be able to help explain this to you in the morning.Help with home buying, contingency money and escrow!?
Only an escrow company can tell you if they can close in 12 days. The amount of time the escrow company needs will vary with the company. It can be done if everyone gets everything done on time, such as your bank getting the money to the escrow company on time, the inspections are done on time, etc. Most of the things needing to be done require at least a couple of weeks.



I seriously doubt 12 days contingency is reasonable.



I suspect the house is about to go into foreclosure and there is 12 days left before the bank stops all sales and ties the property up in court filings.
my only comment at this stage is;



make sure your agent is a buyer's agent and NEVER ever

a dual agent. IF you have a written buyer's agency agreement,

do not fall in love with the house. That always harms a buyer.

DO NOT accept the 12 days, or you could lose your earnest money.



YOU want to buy, they want to sell but it is in the hands

of the lender, seller, escrow firm and other paperwork examination.



luck to you
If you are this lost, you are working with the wrong people.



There is NO WAY an FHA loan is closing in 12 days. Isn't going to happen, 45 days is much more possible. I highly doubt any Realtor or agent would have made a contigency that you be able to close in 12 days, there must be a inspection contingency or something that they are referring to, the sellers cannot expect you to close in 12 days unless you were bringing cash to the table.



My concern at this point is if the house will appraise for what you need it to. If it doesn't appraise, you will not receive a loan for that amount.
contingency means you have 12 days to accept their offer. I've closed a loan in 12 days, but you have to have everyone on board.



If the seller's have agreed to let you do an FHA loan they will have to pay for some of your closing costs. Their bank however may not agree to it. Their bank has to agree to the short sale.



Depending on how much you can afford in a monthly payment, and what it appraises at..... you could offer the seller a higher selling price enough to cover the closing costs and then they could pay the closing costs. Sort of, you're still paying for them in a higher sales price.

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