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Hi All.....I am looking to close on 22nd August. This is after the initial closing date which was 22nd July according to signed contract. The seller exercised the right of using additional 30 days as per the contract signed which is fine. All mortgage side of things are clear from my side and my lender has cleared me to close.
We just came to know that the house has a open permit and the deck doesn't have a CO (Certificate of Occupancy). We still do have around 24 days to close and our sellers have already hired an expeditor to work on this so these issues can be fixed ASAP. The house comes under Town of Oyster Bay.
- Does anyone have any ideas on how quick these issues can be resolved if using expeditor ?
- Also assuming that the issues aren't fixed my attny and agent say that we can close with escrow. So seller deposits some agreed amount into escrow and would keep working on the CO/permit issues. Once issues are fixed the escrow amount is released back to the seller.
I need some advise on this kind of closing with escrow.....as of now I have told the seller that I have to close on August 22nd and the issues should be resolved by then. If not then based of title contingency it would be "default of contract" due to which the contract would get cancelled.
However I do like the house and hence I can consider the below....
- Is it better that I delay the closing so that the seller completes the job.....in this case the headache of issues can never be mine.
- Are there any potential issues in closing by keeping some of sellers money in escrow from the sale proceeds until seller fixes the issues ? My only worry is that if the seller is willing to forfeit that money in the escrow account all these issues will then be my headache + the money will remain in the escrow (not sure if I will get it unless the seller also signs it)......also I don't the headache of litigation and all......
Please let me know if you need any more information and have come through any such experiences which can help me making a decision......
Well these issues were found by the title company so title won't be cleared until then. In that case I am not even sure how the holding in escrow will work ?
That's why it confuses me to how this escrow approach will let one close.....however I have read at many places /blogs where closing does happen......
I doubt your lender will close with these permit issues in play. You really need to get a straight answer on this from lender/attorney/agent.
If they will allow it ask for a LOT in escrow. Get an estimate what cost will be to remedy any defects and ask for double that because once all is said and done it will be that much. Remember once you own that house you own ALL it's problems. And once you let the town on your property they can make you fix anything they want before giving you a CO for the deck.
We had an open permit on
Out house and lender would not close till we closed it. And our buyers were putting 30% down and highly qualified. In the end I was glad to walk away without an escrow hanging over me.
We just came to know that the house has a open permit and the deck doesn't have a CO (Certificate of Occupancy). How old is the permit? If recent, the deck may conform to current code in which case it's relatively (!) easy. If the sellers obtained the permit a long time ago, it may not conform to current code and "fixing" it may involve a lot more than paperwork and a Town inspection. We still do have around 24 days to close and our sellers have already hired an expeditor to work on this so these issues can be fixed ASAP. The house comes under Town of Oyster Bay.
- Does anyone have any ideas on how quick these issues can be resolved if using expeditor ? It partly depends on the above - and how fast the Town works once all is ok (summer time is often vacation time...)
- Also assuming that the issues aren't fixed my attny and agent say that we can close with escrow. So seller deposits some agreed amount into escrow and would keep working on the CO/permit issues. Once issues are fixed the escrow amount is released back to the seller. Again it depends on what's involved here. If everything is up to code the amount could be relatively small. Either way, some attorneys I've worked with add 50% to estimates submitted (you might even get your own) to make certain there is enough of a cushion in case you're stuck with it. What does your attorney advise??
I need some advise on this kind of closing with escrow.....as of now I have told the seller that I have to close on August 22nd and the issues should be resolved by then. If not then based of title contingency it would be "default of contract" due to which the contract would get cancelled.
However I do like the house and hence I can consider the below....
- Is it better that I delay the closing so that the seller completes the job.....in this case the headache of issues can never be mine. We don't know what needs to be resolved with the deck, so it's really not possible to have a real opinion as an outsider. Also, have you discussed the effect of possible rate increases for your mortgage with your loan officer if you delay further?
- Are there any potential issues in closing by keeping some of sellers money in escrow from the sale proceeds until seller fixes the issues ? My only worry is that if the seller is willing to forfeit that money in the escrow account all these issues will then be my headache + the money will remain in the escrow This should definitely be discussed with your attorney - legal advice!! (not sure if I will get it unless the seller also signs it)......also I don't the headache of litigation and all......
Please let me know if you need any more information and have come through any such experiences which can help me making a decision......
I've experienced all three possibilities:
buyers walked because they didn't want to deal with the uncertainties
buyers closed with what they and their attorney considered sufficient escrow (sometimes weather conditions prohibit immediate cure of issue in question, such as snow and ice in winter)
buyers delayed the closing (within reasonable time frame as stated in contract)
I'm house hunting, and seems like every house has some non-permitted patio, bathroom, finished basement.
Such a pain in the ass with these, and selling agent always says its fine/no big deal.
I don't even bother putting offer on these houses anymore.
Hi All.....I am looking to close on 22nd August. This is after the initial closing date which was 22nd July according to signed contract. The seller exercised the right of using additional 30 days as per the contract signed which is fine. All mortgage side of things are clear from my side and my lender has cleared me to close.
We just came to know that the house has a open permit and the deck doesn't have a CO (Certificate of Occupancy). We still do have around 24 days to close and our sellers have already hired an expeditor to work on this so these issues can be fixed ASAP. The house comes under Town of Oyster Bay.
- Does anyone have any ideas on how quick these issues can be resolved if using expeditor ?
- Also assuming that the issues aren't fixed my attny and agent say that we can close with escrow. So seller deposits some agreed amount into escrow and would keep working on the CO/permit issues. Once issues are fixed the escrow amount is released back to the seller.
I need some advise on this kind of closing with escrow.....as of now I have told the seller that I have to close on August 22nd and the issues should be resolved by then. If not then based of title contingency it would be "default of contract" due to which the contract would get cancelled.
However I do like the house and hence I can consider the below....
- Is it better that I delay the closing so that the seller completes the job.....in this case the headache of issues can never be mine.
- Are there any potential issues in closing by keeping some of sellers money in escrow from the sale proceeds until seller fixes the issues ? My only worry is that if the seller is willing to forfeit that money in the escrow account all these issues will then be my headache + the money will remain in the escrow (not sure if I will get it unless the seller also signs it)......also I don't the headache of litigation and all......
Please let me know if you need any more information and have come through any such experiences which can help me making a decision......
I think you're wise to question the security in closing with escrow due to permit issues. You have to remember that Agents/RE Attorneys all want to close the deal fast, so what they're advising may not always be what is truly best for you.
As far as Town of Oyster Bay and dealing with these permit/CO issues - we closed just around this time last year and I will say that they were SLOW. So slow that we almost had to extend our contracted deadline and this was for a house that had no known CO/Permit issues. I was actually more worried about our locked-in Interest Rate expiring, but they produced the paperwork just in the knick of time. My RE Attorney said the only Town that is slower than OB is Babylon.
I think if I were in your shoes, I'd try to hold off on the escrow solution. As you said, if the seller is willing to forfeit that money, it could become your headache or it just might take them longer to resolve. If the deal is being held up and their due diligence is required to close the deal, they may be more inclined to act faster. Do you know how motivated the seller is to get rid of the house?
Another thing you could explore is the possibility of having the deck demo'd and having the seller give you back the demo cost + depreciation amount, but this is always a contentious thing.
I closed on my house where the deck had no CO. I was still able to close, I just had to sign something saying I was aware the deck was without a permit, with the risk down the road of paying penalties to get one, or having to rip it down.
Can the deed to the house even be transferred without a CO on the existing structure?
Of course. I closed on a house with COs open for a dormer, third bathroom, florida room and two decks. My inspector said it was to code and I had 20K in excrow to pay for permits.
Permits got done six months later, cost me like 2k, got money out of escrow and seller got 18K back.
I think you're wise to question the security in closing with escrow due to permit issues. You have to remember that Agents/RE Attorneys all want to close the deal fast, so what they're advising may not always be what is truly best for you.
As far as Town of Oyster Bay and dealing with these permit/CO issues - we closed just around this time last year and I will say that they were SLOW. So slow that we almost had to extend our contracted deadline and this was for a house that had no known CO/Permit issues. I was actually more worried about our locked-in Interest Rate expiring, but they produced the paperwork just in the knick of time. My RE Attorney said the only Town that is slower than OB is Babylon.
I think if I were in your shoes, I'd try to hold off on the escrow solution. As you said, if the seller is willing to forfeit that money, it could become your headache or it just might take them longer to resolve. If the deal is being held up and their due diligence is required to close the deal, they may be more inclined to act faster. Do you know how motivated the seller is to get rid of the house?
Another thing you could explore is the possibility of having the deck demo'd and having the seller give you back the demo cost + depreciation amount, but this is always a contentious thing.
Well the seller has already hired and expeditor to work on this as I have already given him a deadline that we have to close by August 22nd through my attorney. So I guess he seems to be taking it seriously but I am just not sure if it could be done by the closing date......
I don't think they will forfeit the escrow amount but I dont want to be working on those issues after closing. Seller should be working on them. As far as the demolition of deck way that would be a last option since as you mentioned is contentious......
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