So... long story short (as short as possible anyway :)). I found a house which is a foreclosure. I *have* to wait 60 days from now to close escrow due to when my funds for the down payment become fully available. The seller (the bank who owns the property) has agreed to the selling price and m conditions EXCEPT the close of escrow date. They want to set the date 30 days from now and will allow me to extend it 30 days as long as I pay 1/10 of 1% of the house value PER DAY. The house cost is $500,000. So, that's $500 per day and in 30 days that's $15,000. I happen to think this is ABSURD. Does anyone know if this is legal? Seems like extortion to me. FYI, the house is in California. Is there a cap to how much they can charge? I'm already FULLY pre-approved on the mortgage for the full amount. No waiting there... just the 60 day requirement.
2007-12-17 18:28:34 · 4 answers · asked by HelpMeEscrowStuff 3 in Business & Finance ➔ Renting & Real Estate
FYI, i do have a real estate agent who is trying to work this out for me... i'm just trying to see what other advice I can get... thanks for the person who said "get a real estate agent".... uhm.. can't buy a house without one.. of course i have one ..
2007-12-17 19:05:05 · update #1
Thanks for the responses folks! Basically the issue is waiting for the funds to become "seasoned" funds. We have the $$ right now, but the funds don't "season" until early Feb so that is what is causing the problem. While we really *WANT* this house and it is a very good deal based on the location. The bank has to be losing over 150,000 on it. However, we don't absolutely have to have this home so we can afford to just walk away from it. I guess that's the tactic we'll have to take. We'll offer the bank $50 per day and they don't accept then so be it, right? Thanks for the responses folks! I greatly appreciate it.
2007-12-18 04:08:24 · update #2
Lenders are not in the business of 'holding properties' for buyers, qualified or not. They want the property MOVED, and they want it moved quickly. The bank's requirement to you is a way of telling you that, no matter what penalty you pay for getting those funds early, THEIR penalty will be larger than that.
If you want that property, find a way to get your downpayment funds in time. You may be able to borrow against the funds for the short term, or negotiate a short term loan.
When you are dealing with a lender as a seller, it's nowhere near the same as dealing with a homeowner looking to sell. There is no emotion involved here. It's PURELY a dollars and cents situation.
2007-12-17 23:29:07 · answer #1 · answered by acermill 7 · 0⤊ 0⤋
Creative negotiating is needed here. Try offering the bank $505K with a 60 day closing. Or try to get a private investor to fund this home for 30 days offering the investor a great rate of return on their money. Find out how much the bank is losing on this home, so you know if the bank really needs this sale. And last ask yourself do you really want this home, is it a great deal. I don't know of any caps, the bank just owns a home and can set their own terms when selling it.
2007-12-18 06:16:13 · answer #2 · answered by sorinrealty 2 · 0⤊ 0⤋
should have had a contingency put into the sales agreement pertaining to the availability for the funding - what does the sales agreement that YOU SIGNED say?
2007-12-18 16:27:02 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Hire a real estate agent to do your negotiating.
2007-12-18 02:36:20 · answer #4 · answered by Richard H 7 · 0⤊ 0⤋