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I am in a special situation and want to hear advices.
Currently I am in the process to buy a house. The offer has been accepted, but no contract has been signed after that.
According to Massachusetts law, the seller must pass a septic inspection to sell a property. It seems she did not pass the inspection before listing the house, but scheduled to replace the system. Now it is said they will not be able to finish the work before the closing date.
In my opinion, the best way is to postpone the closing date, and proceed only if they fix it.
However, my agent wants to set up an escrow account, restricting distributing money to the seller until the septic system is fixed. In that way the closing date would not change. A problem is, most lenders do not provide such an escrow account, for this specific requirement - they simply require a successful septic inspection before lending money.
Therefore my choice of lenders would largely depend on that, not on best rates/terms, lowest closing cost etc.
Should I insist postponing the date? That would depend on the seller as well.
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"I didn't do it, nobody saw me"
(set 2 days ago)
Location: Ocala, FL
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Talk to your Realtor or attorney for further help first. I think you could set aside part of your purchase price contingent upon the completion of septic installation. In my market (North Florida), most deposits and/or contingency amounts are held either by a real estate attorney or the title agency handling the transaction.
Talk to your Realtor or attorney for further help first. I think you could set aside part of your purchase price contingent upon the completion of septic installation. In my market (North Florida), most deposits and/or contingency amounts are held either by a real estate attorney or the title agency handling the transaction.
The realtor says we can ask the seller to put money in the escrow account (e.g. $30k). She can take the money back only after she finishes the work, otherwise I use that money to install a new septic tank.
It seems to be a common way of solving such a problem, according to what is said online, but I wonder if it is really the best for me. I am not that desperate to buy it anyway.
Around here Title Companies don't like to be involved with such big repairs and large $$.
What happens if it goes wrong or there are problems? What if you don't like the work and want to hold the funds but the contractor wants the money?
Your best bet is to delay closing until the work is done and Inspections complete. That's the only way you'll know 100% all is well.
And it won't be your problem to deal with. Just make sure you get Inspection.
I agree.
I am not crazy about sellers doing repairs, but if your municipality does a septic inspection and closes out the permit, I would want to go that route.
Who knows what may arise rendering the escrow funds inadequate?
I think sometimes there is a conflict of interest between a buyer and a buyer's agent. The agent wants to close the deal soon, instead of creating the probability of canceling the deal. The agent may also want to recommend attorneys and lenders from his social network.
I'm not saying my agent has any intention to push me, but there can be different priorities.
The realtor says we can ask the seller to put money in the escrow account (e.g. $30k). She can take the money back only after she finishes the work, otherwise I use that money to install a new septic tank.
It seems to be a common way of solving such a problem, according to what is said online, but I wonder if it is really the best for me. I am not that desperate to buy it anyway.
Your last sentence tells me everything. If you are not excited and don't really want that house, don't buy it.
Your real estate agent has more at stake here than you. She wants the sale to close because otherwise she doesn't make any money. Realize that is her priority- closing the sale, even with unfinished and open items. I wouldn't want to buy a house and then have to deal with replacing the septic. That's a big job and can get bigger if they find other problems during the job.
This is my experience in a different state, with one house.
The lender didn’t care about the septic inspection. That may be different with an FHA or VA loan. I had the inspection done but it wasn’t a requirement.
The escrow account wouldn’t be done with the lender; it would be done with the closing attorney, I *think.* so the house would close, and the attorneys office would essentially hold the money in escrow til the repairs are done.
From a practical standpoint, how far out are you talking about delaying closing? A week? Two?
This is my experience in a different state, with one house.
The lender didn’t care about the septic inspection. That may be different with an FHA or VA loan. I had the inspection done but it wasn’t a requirement.
The escrow account wouldn’t be done with the lender; it would be done with the closing attorney, I *think.* so the house would close, and the attorneys office would essentially hold the money in escrow til the repairs are done.
From a practical standpoint, how far out are you talking about delaying closing? A week? Two?
My offer was only accepted on Sunday (Otc 3), and we did the house inspection on Monday, no big issues.
The closing data is expected to be Nov 15.
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