What could possibly go wrong during escrow?
As I was sighing that I wish that I would have a hassle-free and smooth transaction, someone asked me....
What could possibly go wrong during escrow?
Buyer does not qualify for the loan
Buyer loses job or is unexpectedly relocated.
Property does not appraise for the price that the buyer has offered
Lender/underwriter doesn't complete loan process on time, or has more conditions to resolve before approving loan. For example, an FHA loan appraiser may identify Section 1 items that need to be cleared.
Buyer does not clear his contingencies in time. And even when the seller issues Notice to Perform, buyer does not comply
Significant repair issues are identified during inspections. Buyer requests credits/repairs or price reduction. Seller refuses. Negotiation breaks down.
Buyer does not deposit earnest money into an escrow account in spite of constant follow ups
Cancellation of contract is instituted, but one party refuses to sign or to allow deposit to be returned to buyer
Buyer's own house was under contract -- but HIS buyer backs out and cancels that sale
Buyer or Seller gets cold feet and wants to cancel agreement
One of the parties to the agreement gets deathly ill...and sometimes, somebody passes away
A day before close of escrow, one party refuses to allow transaction to proceed due to unfulfilled commitment (I know of a million dollar sale that was delayed because the seller didn’t deliver, per prior agreement, a permit signed off/approved by the city bulding inspector)
House suffers a calamity --- fire, burglary, hurricane, etc --- during escrow period and could not be delivered in the same condition as when the buyer wrote the offer
Seller was discovered to not have legal authorization to sell the property
Mechanics liens are filed against the property
Other parties, such as heirs, file suit to halt the sale
And of course, there are the other myriad challenges with other types of sales like short sales. And that’s another whole book!
Indeed, what are the various events that could possibly derail a transaction?
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