Seattle: I have gone through a lot in the last 24 hours to make sure my wonderful buyers could move into their new home this weekend. All of this because of one little piece of paper that surfaced literally five minutes before the loan was supposed to fund. We had other bumps along the way to close, but this was something a little different.
Here's a tip:
If you are trying to give the buyers a credit towards a new furnace rather than go to the trouble of fixing the old original broken one, please don't ask the escrow company to pay the furnace inspectors at closing on the HUD.
One of the items we asked for in the inspection was for the seller to have the furnace serviced and make sure it was in working order. I just had a feeling that it was on its last leg and wanted that insurance policy for my buyers. Well the furnace servicing did not go well and unveiled a cracked heat exchanger. The seller asked escrow to pay for the trip charge and the invoice complete with lingo such as "DO NOT TURN ON FURNACE", "POISONOUS GASES", etc. was submitted and itemized on the HUD statement.
The lender got a hold of this doom and gloom receipt.
They red flagged it and then dug deeper into the inspection to red flag a few other items that they wanted repaired. Ridiculous items that I have never seen any appraiser or lender have issue with - removing half a gallon of water in the crawl space, replacing a few bits of non structural rotted wood, and repair the furnace.
For twelve hours I called in every favor I had with my favorite contractors, furnace guy, and then my beloved inspector who was happy to come back out and provide a written testament to the repaired conditions of the home...just in time to slide it to the funder before the cut off time for wires. It was tight. The lesson learned? Please don't put a $107 bill on the HUD that says there is a problem with the house! Pay for it with your debit card or a check or ask your agent to pay for it. My buyers had the furnace replacement lined up for right after close. No one was trying to pull anything here. They just wanted to use money that could have repaired an obsolete energy hog with a new energy efficient model and ultimately improve the house.
I left my house a little after five AM this morning to meet my furnace guy after already being at this house last night for additional hours while other contractors worked - all on my dime. My buyers are happy, though I don't think they will ever know how hard I actually worked for them because I shielded them from much of it.
I am using this lesson to make sure that my sellers in the future don't add extra pieces of paper to their contracts. Simple is the way to go in this new lending environment!
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More info? courtney@cooperjacobs.com 206-251-5948
Courtney, when you offer to pay for the repair in escrow rather than fix the problem it raises suspecion with the buyer. When the inspection calls for an item to be fixed, fix it.
A home warranty offers another layer of protection for the buyer.
Tom Garcia
Luxury Realty Group
Las Vegas Nevada
Courtney, isn't it amazing what can derail a closing? And why don't your buyers know how hard you worked? Shouldn't they know that the money you get for commissions is actually EARNED?
Courtney- Good job on keeping the deal together! That is really working above and beyond for your clients.Thanks for sharing the tip about the repair bill. I will make sure to handle things like that differently in the future.
Best,
Scott
Court,
Go take a nap my dear. You earned it. Tough lesson, but nice work for your client. I am sure they appreciate it.