I have a cash buyer looking a quick closing because his son is going to be going to ASU and he wants a small condo or house to fix up and live in. With school starting in three weeks we needed to move quick and found a condo that worked out perfectly. I went to the property two days after it was on the market and it had yet to be trashed out, and it was trashed!
On August 5th we submitted an offer for full price, waived any inspections and offered a quick close of August 21st.
On August 8th we get notice that the bank wants to work with us. The sent us their addendums and they set the closing date on or before August 28th. My client is not overly happy, but I told him we would do what we could to try to make it before. My out of state buyer signs the addendums and we send them back to the bank on August 8th.
In the bank addendums it has standard language:
The closing shall occur on or before August 28th, 2009. If transaction does not close on time as agreed, at no fault of Seller, Buyer agrees to pay a $100.00/day per diem charge to the Seller.
Do I like the language, no. Do we have any choice, no.
Fast forward to August 27th, is the buyer ready to close? Shoot, he has been ready to close for two weeks now, one slight problem, the Seller has still not signed off on their addendums from August 8th that they sent us. Guess we are not closing on time. We don’t even have an officially executed contract. Fast forward to September 8th, our extension is about ready to run out, the trash out has still not occurred and the Seller is still not signing off on all their docs. We need another extension and the Seller has sent over an extension giving them until 9/28/2009. Meanwhile my client is living in a motel because school started three weeks ago.
I decided to draft my own extension and send it to the Seller, this one read close of escrow shall be on or before 9/14/2008 and if it does not close on time at no fault of the Buyer, the Seller agrees to pay a $100.00/day per diem charge to the Buyer. It seems fair to me, they wanted us to close on time or pay a penalty, why not hold them to same standard?
Well guess what, for the first time since we started working on this quick closing cash deal over a month ago the Seller is quick to respond. No. Yea – no surprise, I never expected them to sign it, but it does prove a point. Foreclosure banks want you to hurry up and perform, and will fine you if you do not, but they will make their own rules for themselves.
I know, we didn’t have to sign the addendum, but then my buyer does not get the Phoenix Condo they wanted. We are at the mercy of the banks right now. They are writing the rules and not only are they completely in their favor, they are completely non-negotiable. Under normal market circumstances I would never advice my clients to sign the language in a bank addendum, but these are not normal market circumstances. If you want the house, if you want that condo or house foreclosure deal, you need to sign it. Yup, it sucks.
