Why is the buyer paying extra per deim for the listing agent’s mistakes? Many first-time buyers in Northern Virginia arebuying homes that are foreclosures or short sales. I recently closed a FHA Loan for a buyer that purchased a foreclosed property that was a great deal! This was a loan I inherited the after the first lender could not move forward because the buyers credit score had dipped below the lender requirement of 620 or higher.
We do loans for FHA buyers under 620 score but most times it makes more since to raise credit score quickly if possible.
They were already two weeks into the 45 day contract when I took over the transaction. So I told the buyer and his Realtor they would need a two week extension for the credit update and rescore. And although nothing was guaranteed I was pretty sure if we made a couple quick tweaks to credit we could raise the score and close the transaction with very favorable terms. The bank granted the 14 day extension but at $100 per day until closing.
Fast forward and just as I planned the credit updated to above 620 and the loan was sent to underwriting. Also the appraisal report was back at higher than sales price but subject to some very minor repairs. The buyer elected to do the small repairs since the contract was “As Is” and the bank expressed in writing they would not participate in any repairs even if they were conditions of the appraisal, now conditions of the loan approval.
The buyer did the small repairs but the buyer could not turn on the utilities in the home which was listed in the appraisal to be done prior to final inspection. After calling the listing agent’s company personally I was told all utilities were turned on, so go ahead and request the inspection. The appraiser was great he actually inspected property and sent the compliance report 24 hours after the request, which would have allowed us to clear to close and buyer only pay three days of the $100 per deim requested by the seller (bank). I guess it was too good to be true because the utilities were not turned on(no gas, no electric, no water). Unbelievable! After several he said, she said conversations more like accusations the listing agent again on the next Monday stated the utilities were on in the home. So almost same routine occurs appraiser goes back within 24 hours and quickly sends back report. The electric and gas were on but still no water. Meanwhile the buyer is still being charged $100 per day until closing.
The listing agent is now insisting that the appraiser has gone mad and he just wants to go back to the property for extra inspection fees, oh by the way those “trip” fees were charged to the borrower as well.
Finally that Friday also the last day of the extension the loan closed, but not after ten extra days of per diem, three final inspection fees, and a listing agent that still could not figure out in his words “why the appraiser was trying to complicate things”.
After several attempts to speak with the bank about the representation and the situation they elected to still charge the buyer for the listing agent’s mistake.
He did give the buyer a three hundred dollar closing credit for the cost of the inspections. But ultimately the buyer had to pay for the listing agents mistake, neglect, or inexperience about something so routine like turning on the water at the main valve of the property once the utilities were turned on, wow!
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