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Posting this here as opposed to in the realty section because this situation (as it has been explained to me) is unique to CA........
We're closing on a short sale in SD County, hopefully by the end of the week. This will be our first CA home purchase (previously owned in NC) and our first short sale purchase. I'm very confused/concerned about the process.
In NC, I vividly remember the day of closing going something like this: we went to the home for a final walk-through inspection (already vacated), went to a lawyer's office, signed a few trees'-worth of documents, then immediately received the keys and that was it.
For this purchase, I'm being told the sequence will go like this:
1) We go to the escrow company to sign loan documents, after which is a 24hr loop from my lender to review and approve everything.
2) We perform a walk-through inspection (the house is currently occupied) next day. I've asked my realtor point blank what (if any) recourse we have if we don't like what we see on the walk-through (holes in walls, appliances taken, etc), and he said it's not meant to be a contingency of the sale. Uhm, what?
3) The loan funds after we transfer money into the escrow account and my lender transfers theirs.
4) The house 'closes' the day after funding (deed registered in our name, blah blah blah) and we get the keys. Hopefully, the current owners are out.
This seems shady, if not downright stupid. As a buyer, what is my 'point-of-no-return' in this process? Again, I asked this to my realtor point-blank, and got no solid answer. There was some long speech regarding how he's never had an incident with this and how the sellers could/would be on the hook for legal action should they wreck the place or steal anything on the way out, but why would I want to deal with that? To me, it seems my last 'bail out' is not signing the loan docs, but shouldn't there be something more towards the end of the process for this? I just imagine a situation where we sign the loan docs, everything moves forward, and I either end up with the sellers wrecking the house or refusing to leave. I've already made it very clear I won't entertain a 'rent-back' (why would I rent to people who have already proven they can't pay for the space they live in?).
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