Thursday, March 15, 2012

Still in a Holding Pattern

We are still in a holding pattern with the contract on the new house.  Normally, a seller and buyer agree to some terms, the seller has a 10-day inspection period to look at the house and negotiate repairs or back out of the deal.  At that same time, an appraisal of the value of the home is being performed, and if the appraisal comes in below the contract price, the buyer can renegotiate the price with the seller.  Usually, everything is settled in 10 days, everyone knows how much time they have to move out and move in, and the lender handles the rest.

However, in our case, a late appraisal was performed and the appraiser was unable to determine a fair value for the property, because it is so unique.  First off, it is a well built, high quality home in a decent neighborhood, but all the surrounding neighborhoods are pretty trashy and run down, so all the comparables available are for houses that sold in older neighborhoods with less acreage, because there simply are no houses on 4 acres in this city beside the one I'm trying to buy.  So, the appraiser had to send the job to an underwriter, and he came back with a value that was $100 over what we are paying, which gave us no negotiating room.

Some law says that since the appraisal had to be handed off to an underwriter, we now have to have a second underwriter do a second appraisal, thus dragging out the process for another week.  I don't quite know what is going on with the seller, but she hasn't started packing yet, because the contract really isn't official until all the appraisals are done.  I don't blame them for not wanting to pack until they know they have to move, but the clock is ticking away.

I have this fear that they won't move out by the closing date, which will render our contract dead, meaning that we can't buy the house.  We will have just spent all that money on inspections and could still lose the house.  The worse part is that after we came under contract, other people started calling and asking about the house, so now the seller feels that perhaps one of these other potential buyers might be willing to pay more and allow them more time to move out.  So, there's always the possibility that they might try something shady to cancel out my contract.

The sellers are still demanding that we release our earnest money to them early and extend the close of escrow, but neither of those tactics would work in my favor.  I need escrow to close sooner, so that I can start spending money on fixing up my current home.  While we are in escrow, I can't even pay my taxes or make any large purchases, because the loan officers are scrutinizing our every financial move and with banks being so skittish, they are looking for any reason to deny a loan.

Midge has been sick with diarrhea and vomiting, and I've been avoiding taking her to the vet, because I know it will result in a huge bill that could jeopardize our home loan.  The horses are also due for their annual vaccinations, but I'm going wait until escrow closes and get the Coggins test done right before transporting them between state lines. Coggins tests are expensive and the results are only good for a few months. Of course if Midge takes a turn for the worse, I'll take her in and see if I can work out a payment plan with the vet.  It's strange knowing I have the money to pay for such things, but can't use it for 45 days.  If we extend the closing date to 60 or more days like the seller wants, then our finances will be restricted that much longer and we also have to repeat supplying the lender with the same paperwork every 30 days, which means more work for us.

We've considered releasing the earnest money early to help the sellers move, but it sounds like even with the money, they still think they can't get out in time.  So, that kind of a deal would require a very special contract that would protect us from losing that earnest money should the sellers not move out or should they trash the house out of spite or through the careless moving of furniture on their way out.  I just want to keep things simple now.  Let the contract stand as is, and be firm that the sellers must vacate the premises by the original closing date.  We'll see how it goes.

Ultimately, if we get the house without complications, we will have a really solid, well designed, well built home with a lot of space for the horses, but I will have to get a full-time job right away to recover from the hemorrhage of our finances, which means I probably will only be able to ride the horses in the evenings and weekends.  If we don't get the house, we'll have to go back to the drawing board and look for something else to fit my nearly impossible requirements.  Most of the homes I considered previously are now under contract or sold and what's on the market now is not even close to what I need.  There seems to be shift in the real estate market, and those who did not get caught up in the variable loan fiasco of recent years are taking advantage of the low interest rates and the government regulation of banking behavior.  So, now there is some competition among buyers.  That can turn into a feeding frenzy overnight, so I really hope the sellers can just respect the original contract and let this be a smooth transaction.

Of course, now that I'm moving, I'm starting to get business calls from animal lovers and animal breeders who want me to perform photo shoots.  Unfortunately, all of them want to time it to happen after I move, so I'm taking down names and numbers and telling them that if I am still in the area at that time, I'll call them back, but otherwise they'd have to drive to Arizona to get their special photos.  Bummer.  Why couldn't this have happened last year?


Cut-N-Jump said...

I would be afraid of releasing the earnest money and having the seller screw up the deal, your contract fall through and they keep it. That would suck!

fernvalley01 said...

shaky times, hope it works out for you

achieve1dream said...

Ugh, crappy crappy. I hope things improve and you get the house without further complications!

I know this is a month old, but I hope Midge is okay!