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We are in the process of purchasing a great house in ID. This house is being bought due to my job relocation, so closing quickly is of the essence. We found a great house, that was vacant, great price, made an offer and had it accepted. Found an awesome mortgage broker (love her, total spitfire) that is cranking out our loan in the needed time.
Now for the problem. We made the offer December 16th, signed the contract, gave the earnest money, paid for the appraisal. On December 30th I get an email from the realtor saying, oh, by the way, the owner's wife passed and the title needs to go through probate, they can just do a quick probate since he's the surviving spouse.
At first I felt bad, geez, the guy lost his wife. Turns out 4 months ago she passed. They knew the title needed to go to probate court but just hadn't done anything yet. My mortgage broker and I were completely unaware, so we locked in a rate for 30 days.
There is no way they will have the title cleared by the 14th of January when we planned on moving in. In fact, they are hoping that the title will be clear on the 24th, but then my lender has said, it will be 7 days after that to close the loan, which is past our lock date. If they actually get it in on time.
My question is who is responsible for the fee on the extension? Since it was not disclosed to us at time of signing the agreement we went with the 30 day lock, we would've done 45 or 60 days if we knew the title still needed to be cleaned up.
My question is who is responsible for the fee on the extension? Since it was not disclosed to us at time of signing the agreement we went with the 30 day lock, we would've done 45 or 60 days if we knew the title still needed to be cleaned up.
The 30 day lock was something you decided to purchase to hedge against higher rates. It was nobody's choice but yours. Kinda like if you decided to buy a new tv to go in the house, then something came up. You would still be responsible for paying for the tv.
That said, it doesn't hurt to ask for a concession from the seller. Worst that could happen is they say no. If it were me, I wouldn't bother with a rate lock, as I would think that this might take even longer than your worst case scenario.
How is/was the house owned? Jointly with right of survivorship? If so, the house automatically passes to the surviving spouse and is not included in probate.
The 30 day lock was something you decided to purchase to hedge against higher rates. It was nobody's choice but yours. Kinda like if you decided to buy a new tv to go in the house, then something came up. You would still be responsible for paying for the tv.
That said, it doesn't hurt to ask for a concession from the seller. Worst that could happen is they say no. If it were me, I wouldn't bother with a rate lock, as I would think that this might take even longer than your worst case scenario.
Not necessarily.
What was the closing date on the contract? The listing agent surely knew they could not close by that date, but more importantly, the listing agent facilitated a sale knowing the seller's name was not correct in the contract. At the minimum it should have been the "estate of" if the home had not been thru probate and title not conveyed to surviving spouse. In addition to the contract being corrected, the appraisal will require correction. This is pretty basic and the listing broker should be notified. They may pick up any extension fees.
If all you have is a 10 day delay, the OP is getting off cheap. Extensions run on average .02 bps per day of extension, so you are talking g about a 1/4 point. So if a 220K loan, it would be $500 to extend 10 days.
How is/was the house owned? Jointly with right of survivorship? If so, the house automatically passes to the surviving spouse and is not included in probate.
This would be my question, too. Normally, a spouse passing away would not require probate.
Our real estate contracts have a guarantee from the seller that they have marketable title. If that ends up not being the case then the buyer can elect to cancel the transaction or to force the seller to cure it financially or to pay additional premiums to the title company so that they can insure over it. It's a pretty bad thing for someone to put a house on the market when they know that there is something wrong with the title. Our listing agreements also have a guarantee from the seller that they have marketable title, so they'd end up owing real estate commission even if the transaction fell apart.
I suspect the buyer did not use an agent. I would pick up the difference between who signed the Purchase Agreement and the ownership immediately. And you straighten this out in the first 24 hours.
The listing agent may not even have known. The question has to be asked before it becomes clear.
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