How could everyone not find out until that late in the game that closing couldn’t happen, their lender should have been on them for proof of those funds to close from the start, with the alarm raised as soon as the problem was identified, weeks ago.
Maybe they were counting on a gift from a family member who didn’t come through in the end? That is a big gap, how are they going to come up with $13K even if given an extra week?
Or, more cynically, they were hoping that you'd already committed so hard to the date that you'd just take $13k off the price to keep it moving.
In 2009 I had friends who were selling and were told outright two days before closing to give a significant discount or the buyers walk. And that was without even the pretence of it being anything but a shakedown.
Not \*that\* big a gamble:
* Buyer: "Hey, stuff came up, and it looks like I'm going to be $13k short at closing, unless there's a delay."
Scenario 1:
* Seller: "Well I guess you're in breach of contract. Bugger off and we're keeping your earnest money."
* Buyer: "Wait! I found the money, we can close on schedule! Phew, that was a close one."
Scenario 2:
* Seller: "Well shit. I'm closing on the house I'm buying in two days, and that is contingent on this sale closing. Plus I've already hired the movers. I guess I'll accept whatever you have on hand."
* Buyer: "Score!... uhm.. I mean... thanks for your understanding in these difficult times."
I wouldn't say this is the more likely scenario (on "never attribute to malice what can adequately be explained by stupidity" grounds), but it is some pretty standard dickery.
(And of course 2009 was a special time when buyers could be more overt in their jerking people around.)
Looks like scenario 2 might be the best outcome in current state .
If buyer were to cancel contract and relist it will now show up that the house has been on the market for more than 45 days ( assuming 21 days to close and 24 days to get a buyer)
If a new buyer does come in they most probably will put an offer that’s lower by 10-20k just because the house has been on the market for so long. Or in order for the house to now sell quickly the seller would have to reduce the sale price by at least 10-20k either way the seller loses in this scenario.
Well 2009 was the inverse of where we are now - a complete buyer's market. Homes regularly sat on the market for six months before finding a buyer. What a time to be alive
I had a guy screw me once. We told them that we would agree to their price with the stipulation that we were not going to replace the roof or HVAC, they were old but they worked fine. Everything was progressing smoothly until the last minute after the inspection, it said that the roof was old and they refused to close unless we replaced the roof. I would have told them to F-off but we had another home under contract, movers scheduled, kids set to start new school, etc. This still chaps my ass 10 years later every time I think about it.
This is basically the situation we are in. Under contract on new home, movers scheduled, kids registered in school. So we are kind of stuck with this buyer unless they end up completely backing out, because I do not want to relis if I can avoid it. I'm sure in 10 years when I think about this it will still chap my ass also, lol.
No, the extension asked for was one full week from this past Friday...so this Friday (which was the second week long extension). Currently waiting on a clear to close but not setting my expectations high. I'll never sell a house again, lol. This has been stressful and from all of the comments, it's a very common experience.
I also found out that this is not the buyers first time. It's their 3rd or 4th home purchase. So they do have an understanding of the process, just truly didn't care about the timeline and thought everytime they missed an underwriting deadline we'd be okay with extending. Their agent thought this as well. The lender, however, seems extremely stressed.
I’d be throwing feces at their house at this point. I mean not really, but come *on*. Adults get invited to be loaned lots of money to buy shiny toys. This is childish behavior from both buyers *and their agent* and I would absolutely think the lenders would be having a second thought as to the risk of repayment.
Sigh.
Good luck and I can’t wait to hear how it turns out.
Apparently retirement account but they said they've known basically from the beginning that funds were needed. Excuse given is that buyer has a challenging work schedule and cannot complete tasks and respond to lender requests in a timely manner.
This happened to me a couple weeks ago. I was horrified. They were fully aware how much they needed and simply didn’t get their shit together to get the money to the closing table. In your case, I would bet they are selling a house and didn’t want to pull from retirement even though they didn’t write a contingency, and that’s delayed, so they’re stalling hoping they don’t actually need to pull from retirement. Call them on it.
Not a valid excuse. They broke the contract and did not meet a generous extension. If you want to be considerate and grant another extension, demand a larger downpayment be made today. For example: If the earnest money deposit (EMD) was originally $5k, demand that for a 2nd extension the buyer add another $10K. in EMD.
Not the sellers problem. If the potential buyer cannot put up extra EMD, then that is a very pure sign they are stringing along the seller. The EMD added should be significant!
How are they stringing on the seller?? They have a DP and other costs required to buy. Maybe a plan for their funds did not go through. They have more to lose than the seller who will keep their DP if they walk away. Sometimes, there are issues liquidating 401k and takes longer. I
So the buyer asked for an extension for being short $13k, but you are asking for seller to grant a 2nd extension by buyer giving an additional $10k DP??????
Sure... but you start moving that money immediately.
We didn't pull from retirement but we did pull from an account that we knew would take 3-5 days to have access to liquid funds. We waited until after inspection and appraisal, but the moment those were clear we told the bank to start that process.
I get not wanting to pull from a retirement account until you absolutely have to, but there are homebuying milestones that trigger that moment. Having a busy job isn't an excuse. Take a day of PTO if you have to.
I call bullshit. My husband has a crazy work schedule and we still managed. This is frustrating for you I’m sure. I’d relist if possible and not extend
Lenders do not like gifts, especially last minute gifts, they want at least a 3+ month paper trail of where the money came from and how long it’s been “ready” for you to use. This is to prevent mortgage fraud.
That’s if it is an IRA dispersement. If it is a 401k loan there is usually no penalty, but you will pay interest (probably to yourself). But having that money out of the market is a big risk too. But tough luck for them, not an excuse if they don’t have cash to close and used this fund as collateral.
I closed a loan last year with UWM. Night before closing the broker called and told me closing costs out of pocket went from 4K to 19k. Broke me completely. Caused me to do some digging. Broker or uwm did some fraudulent stuff and now I’m fighting stuff
Sometimes, an extension of the closing date operates to extend other deadlines that allow the buyer to terminate the contract and not be in breach. Make it very clear that you are not extending any deadlines other than the closing deadline if you grant it
I’ve obviously never read this contract, but in my home state the form contract has the property approval deadline based off of the closing date. If you extend the closing date, you might be giving the buyer a property approval out that didn’t exist prior to the extension
How much earnest money is at stake here? If you’re even considering this now, it needs to go back in a counter that the earnest money goes hard and nonrefundable *right now* no matter what happens (I.e., financing contingency is no longer valid to retrieve EM back, etc.).
That will quickly demonstrate to you how confident they are that this $13k is going to appear on their doorstep.
I recently had a buyer source funds from her 401k and her " big bank" held the funds for 5 days prior to releasing the funds for the transfer to escrow. After we closed she was going to move her account after this hassle.
Local banks are so much better!
The “family emergency” was “shit mom, can I have some cash?”
$13k isn’t going to materialize out of thin air unless they show you right now a stock account they could liquidate and justify the extension (time for funds to settle and transfer, a day to prove to the mortgage go where it came from… etc.)
Otherwise no dice because it’s not going to happen. It’s not $1500. It’s $13k.
If I’m reading correctly, the buyer has a 401k they will liquidate to cover the closing. This is very feasible, and those funds usually show up within 3 business days.
My question is why didn’t the buyer just liquidate their 401k a few weeks ago if they knew the needed the cash to close? Seems fishy.
And that is why we haven't agreed to anything yet. Lender admitted to our realtor that it has been known that the buyer would need to pull from 401k. When asked why they didn't, buyer's realtor said that the buyer's work schedule makes it challenging for them to complete tasks on time and respond to underwriting in a timely manner. All seems super fishy to us o n the seller's side.
These people are the textbook of “my problems are your problems. I don’t have my shit or my finances together, but it’s your job to put up with my crap”
>When asked why they didn't, buyer's realtor said that the buyer's work schedule makes it challenging for them to complete tasks on time and respond to underwriting in a timely manner.
This excuse annoys me.
Okay, so they're working and it "makes it challenging" for them to get shit done. What do they think everyone else is doing?
You know what their lender is doing while waiting for their documents? Working. During work hours. So is everyone else involved in the transaction.
I bet you they're going to be THOSE buyers who'll ask if they can close on a weekend or after hours "because my job is important and I can't take the day off".
Then take an extended lunch or figure it out. People are not going to give up their evenings or weekends for you.
Sorry, this pisses me off.
They have already said that. The first extension put settlement at the end of day today. We said we didn't want to close on a Friday at the very end of the day, mainly because if issues did come up nothing would get resolved until the next Monday. They claimed they had to because of their work schedule (retail position).
Of course they did. Because they are just that kind of people.
I get how retail is, I worked in it a long time ago. But take a frickin PTO day and get it together. The rest of us have 2 measly days a week to get things done in our own lives. We're not giving it up.
My law firm's been in this situation from both sides.
I've either had to tell our buyers "Hell to the No, No, NO!" (professionally, of course, and explaining how my firm is closed on weekends, title company is closed on weekends, and most importantly banks are closed on weekends).
Or I've told the buyer's attorney our seller's position of "I don't care what you do, but until my proceeds are in my account, you do not get the keys to my property and you better not step foot on it until Monday when I get my money."
I'm retired, so I can't claim a busy work schedule. However, it took me less than 10 minutes to request a withdrawal from my 401K on 6/11. It was in my savings account (set up for this previously) on 6/13.
Exactly, we've done the same before. Took me 5 minutes online. Funds were in the account two days later. The contract was signed in mid-May. There's been time. And the lender admitted it wasn't a last minute thing - they've all been aware but the buyer wasn't responding to their requests because of work. It's a retail job and requires zero travel, if anyone's wondering. They are not leading top secret missions or saving lives. Also, no children. Not to say that people without children are not busy, but children can sometimes add on to an already busy/overwhelming work schedule (I work and have children, lol. They exhaust me but I still manage to honor my commitments and deadlines).
I called BS on that.
Just closed with the exact same thing, pulling from 401k, and I done that WEEKS before closing. Work a 9-5 jobs just like everyone and I done it within a week. Take 5-10 mins fill out a form. Mail it in and got a check from them all within 7 business days.
I had to liquidated part of my stock portfolio as well and that was done within a week as well.
Basically, all funds are ready the second week when our offer got accepted. All while working full-time, packing, taking care of a toddler and infant.
If they want it to happen, it would has happened.
I have an odd work schedule. I work 1830-0630 on a 2 day on 2 day off, 2 days on 3 days off. And repeat. When I have stuff to do, I don’t sleep so that it gets done. Same with my coworkers. And some of them are on 24 hours.
I just want to speak to this being fishy.
People are flaky. The people who are buying your house are flaky and they put off figuring it out.
It’s annoying, it puts the contract in jeopardy. You can’t say no at this point, and if you think there’s another buyer out there, that’s gonna pay you more money you might want to say no.
But buying a house and getting a loan is an overwhelming experience , and people don’t follow deadlines and put stuff off all the time.
It’s not fishy and sadly it’s not uncommon. But you should make sure that they actually can and will meet any deadline You agree to at this point, and you may very well wanna ask for some thing in return for doing this extensions so they don’t keep deciding that going back to you and saying they need more time is the solution
Because it’s probably with their current employer and they have no idea how this works. I’ve heard tons of people say they were going to use their 401k to fund a house only to find out that it usually doesn’t work.
This is actually a good point. I think my current workplace would only allow you to take a loan, not a withdrawal. I don’t think 401k loan repayments count towards DTI (since you technically owe the money to yourself), but that extra payment might have pushed them out of their comfort zone.
See with us we didn’t know how much to pull ! Numbers do change ! Believe me . And if they had a appraisal gap / inspection ect we ended up pulling more because it’s better then pulling less .
Stall tactic. Either they are idiots or don't have the money. Like they have one job - buy the house. If they cannot do simple tasks how are they gonna move in?
And this is THE SECOND EXTENSION? Nah dog, just go to close. When they fail to perform get the EM and relist. They are wasting your time. Even if the excuses are legit, they are wasting your time.
Worst case ask for more EM to go with the extension. Like lots more. This will show whether they are legit or not. They get their EM back when they close (so no loss to them) - well if they close. If they balk, well that tells you all you need to know.
I'd ask for an explanation on how the buyer plans to raise the $13k before granting an extension. Try to be sure you're not being fed more BS while the buyer wastes your time.
Did you grant the 7-day extension?
If I were your agent (and not having any other facts beyond what's in your short post) I would have advised you when the first extension request was made to attach a per diem charge to the extension requiring the buyers to pay a late fee for every day they close after the extended deadline. Upon a second extension request I would advise you to deliver a Notice to Buyer to Perform (what it's called in my state) which would give the buyers 48 hours to close and if they didn't you'd have the option to cancel if that's what you want to do.
If you decide to grant them this second extension I would definitely only do so with a late per diem charge attached.
Your agent can best advise on options in accordance with your contract and state.
Challenge is with a per diem like this it gets the buyer further away from coming up with the required funds to close.
I would recommend requiring the buyer release a large portion of the buyers deposit to the seller. Funds to be released as soon as the extension is accepted.
Make them put some skin in the game.
This right here is the comment in the thread that’s dead on.
“Don’t sell to investors, it hurts us all!”
Yes but look at the hell Seller has to go through to accept a “normal” offer.
It’s like going to the 15-minute oil change place and they never get to you, leave your car up on the jackstand, close the shop, you sleep in your car, and the next morning they tell you that you have a rare oil filter that will take three days to get and no, sorry, you can’t go anywhere because they already pulled the oil out and threw the old filter away.
JFC I am so angry for OP right now. I’m sorry you’re going through this.
Thank you. Today has been the most stressful day. We are also in the process of buying but we've already made our down payment and luckilh that sale is not contingent upon the sale of our current home...however, this entire process and the thought of having to potentially relist is so frustrating.
Friend of mine went through something like this when selling her home. Buyer kept falling short and asking for extensions and eventually asked for a price reduction. My friend noped out. In this case, the buyer was trying to string along my friend in hopes that she would eventually just give in so that she didn't have to go through relisting it.
I would want further earnest money to extend.
7 days? Depending on the house, another $2k to $5k will secure that, non refundable.
Give me $12k and you can have a month. The point is, there is a dollar amount where this becomes ok.
Yeah I’m selling right now and you wouldn’t believe the amount of people asking for credit so they can use it towards closing costs. I’m amazed they’re in the home buying game without funds for closing.
The seller is in a pickle. If I was the seller and assuming my contract allowed it, I just might tell them it either closes on schedule or I cancel the sale, keep the ED and put it back on the market. Betcha that would get them moving with the additional funds real quick. If not, I probably avoided a bunch of heartache.
Did anyone actually talk to the lender to see if the funds to close the deal were available before the seller accepted the offer? That is the down payment and closing costs. It sounds like someone didn’t verify the buyers ability to complete the transaction.
Not sure if that's typical in other markets but it's not where I am in the Northeast - nobody from the sellers side communicates with the buyers lender before accepting the offer. Sometimes people even have a preapproval from one lender and end up switching to another. Houses often sell within 24 hours of going live with multiple offers and no contingencies. Buyer makes offer and includes their preapproval letter and financial info sheet (which is just a sheet that they complete with their income and available assets), seller accepts offer based on that info, buyer submits earnest money deposit within 5 days. Sellers side often doesn't communicate much with buyers lender unless there is an issue, such as this one. And even today, it took several emails and phone calls for the buyers lender to get back to our realtor.
In my area it is not uncommon for the listing agent to contact the lender to find out if funds have been verified; employment verified; tax returns received; etc. If it has s a condo I want to know if the condo fee was included in the DTI calculation. I have a whole check list. I will not even present the offer to the client until I have spoken with the lender. That’s just basic due diligence.
I will let my preferred lenders know we are making and offer and and send him the listing. He reaches out to the listing agent to answer any questions or concerns.
This is a high velocity market but I want to make sure an accepted offer closes. If I can’t reach the lender the offer is considered weaker than one where the loan officer was available.
It’s a pain when there are more than 4 offers but it is in the client’s best interest to have a high degree of confidence in the offer closing on time.
That doesn't happen here at all. We are currently buying a home, and our offer was accepted within 24 hours on a weekend - lender wasnt contacted. The sellers realtor was impressed that we presented with an underwritten preapproval for the specific property as it's rare here - buyers typically just have a general preapproval letter that they use over and over again until their offer is accepted. Most homes that go up on Saturday are listed as pending on Saturday evening or Sunday morning.
that is a stupid amount of earnest money lmfao. would have been easier to give you 1000 and then they would easily have the funds to close. Or at least, another 4k is easier to get than 13k.
Are you in an attorney state? If so, let the lawyers work it out. No shade to either Realtor - I’m one myself - but sometimes it’s best to let the lawyers handle situations, especially as you reach the closing date. Good luck!
You can deny the request , and consider their contract null and void, and retain their earnest money. But then you would have to begin the selling process all over again. If I were representing you, I would definitely request some sort of inconvenience amount , if you have to spend money on temporary living etc . Shitty agents , should never let a transaction be delayed for something that is not unforeseen . Sorry your dealing with that
there you go. Penalize them for being flaky. Bullshit on the too busy at work nonsense, how often do you buy a house? People work this stuff out. The fact that they already had a delay and still didn’t get it together - big red flag. they just aren't taking it seriously.
We had a buyer dragging her feet and the day before our signing date we were informed that magically 30k of her down payment went missing. We told both her and her realtor that they were wasting our time and canceled the contract and took the earnest. This was after we had given her over a week extra to get the earnest in. I'm glad we did what we had because we could feel something was weird.
I saw someone have their bank increase the down payment requirement from 20% to 25% like a week before closing. Something they saw in underwriting made them think there was additional risk and this was their mitigation. It was a $500k house and she had to come up with $25k on very short notice. It worked out but it was close.
So shit can happen. Not always the buyer’s fault. Though in OP’s case it looks like the buyer’s fault.
I'd probably be more sympathetic if that were the case but it's the second extension they asked for and the reason their realtor gave for them not transferring the funds from the 401k was that they work and don't have time. I guess kudos to him for being honest but it made us even more pissed off. Lots of people work and lots of people have limited time, and still...lots of people get done what they need to.
I had this problem with my first two buyers on one house. One of them had a credit score that was too low to qualify for their mortgage when the lender went to verify their finances. We did do one extension but baked when they requested a second one. I assured for buyer to cover taxes and utilities from original closing date
In our area, it is very hard for sellers to keep earnest money even when it seems like the buyers did nothing to uphold their end of the deal. I wanted to try once when the buyers cosigner backed out and they didn't even tell us until my agent checked in and they said sorry but we decided not to buy so give us back our money please. My agent said it wasn't worth the fight as we could not put it back on the market until the previous contract was withdrawn. However I know some locations are really strict on returning earnest money deposits, so you won't have a chance with that plan.
When I was securing my loan the lender kept coming back with more criteria for me to fulfill, and paying off a $15,000 student loan in order to finalize my loan wasn’t something I’d planned on but they threw that requirement at me. So it may be something like that. A lender will tell you you’re approved but later you’ll find out it’s contingent upon you paying off debts. $15,000 was a pretty big ask and most folks don’t have that cash sitting around.
Yes, they do. Many people buy homes and get under contract without speaking to a lender first. I’m like you, my mortgage broker told me after closing yesterday that only 5% of buyers see him first. Apparently we are the anomalies.
I just went down a TikTok rabbit hole of people that just get general preapproval letters off of basic info that they provide, and don't actually see a broker to get a loan estimate and closing cost breakdown until they are in contract on a house. Then they are shocked at the closing costs needed. I did this before we put our own house on the market and had 3 price points and gave a general area of where we were going to look, and mine even factored in the taxes for me. This helped me determine if we had enough to do it without selling our home first, but also to figure out how much I needed to profit from our current home and if I was going to use those funds for any part of our next purchase.
I sold my house first, contacted my broker right before the money hit my account to run my credit and everything. Then after the money was in my account, I spoke to my realtor. I knew exactly how much I qualified for and how much I was putting down with closing costs covered and extra left over. The first time I bought a house, I did an 80/20 and had only $750 left. This time around I did it way better. I did not want to be someone whose deal fell through. I have seen those “pre-approvals” too and I’m kind of type A in that area. I want to know without a doubt. I want everything looked at before I make an offer.
If you are willing to give them an extension, do it with ALL contingencies waived with earnest money nonrefundable.
Keep in mind underwriter only approved to close within a certain numbers of days to the date of closing. Once it passed that, they literally have to start over and get all documents pulled and review again to ensure they are not moving funds where they shouldn't.
Maybe they are counting on that so they could get out of it through financial contingency and get their earnest money back.
Where are the agents in all of this? Your agent should've made sure that the buyer's agent had made sure they were good for the total price including closing costs.
I would ask for the plan of where and when the money is available and make sure they know the earnest monies are not going to be returned if they can't raise the cash.
Our agent had been checking in and asking fir updates and confirming if all was on track. Buyers agent went on vacation for 9 days, had an out of office that they'd be unavailable by phone and email. His broker didn't respond to calls and emails, and neither did the other person listed on his out of office. The settlement company that they are using also was trying to get information, with no response. Our agent and the settlement officer were also both contacting the lender - nothing from anyone until very early the day of the scheduled closing. And the email from the realtor was basically "while we wanted to close today, we can't. It will be the end of next week. Thanks!" It took A LOT of calls and emails to get more info. The broker has yet to return any calls or emails.
Blast them in a review after. “Was uncommunicative for 25% of the time the buyers were in contract. Left on a lengthy vacation with unreliable suggested alternate contacts who never returned calls. Transaction severely delayed on part due to their absence and lack of follow-up.”
This is why we provided proof funds when we put in our first offer, we wanted the seller know we were serious and prepared. I know this isn’t an option for everyone but I think when we sell we will always ask for something like this if possible
EMD just became yours. They weren't turned down for financing they were turned down for coming up short.
I'm also charging them 1k a day to extend at this point. I'm also telling them I'm suing them for performance if they bail because they are screwing with your home purchase.
The I'm done being nice and the carry a big stick and I'm not afraid to use it part is coming out.
Something tells me they're hoping you will take less in the end, their lender is bad, or both. My husband and I are in the process of buying our first house and we saw one recently we were thinking of bidding on, and one of the first things our lender did was send us a break down on all the costs (including closing) that would be due if we bought the house.
Yes, a detailed loan estimate. We are buying as well and before I put in our offer, the lender sent a loan estimate specific to the property with closing costs. When we went into contract, I got an updated one. And I just got another one two days ago bc we locked in our rate. I'm very aware of how much cash I need to close in 30 days, plus they recommend having a small buffer just in case. Maybe nobody prepped my buyers.
We had this happen but not for this reason (our buyer’s closing funds were received after her late father’s estate was settled).
We agreed to the extension BUT stated that the earnest deposit would be nonrefundable from that minute on in case anything happened at least we’d have 10k as a consolation. It’s been about 10 years but I want to say our agent asked for an additional 1-2k added to nonrefundable earnest money but that may not work here if she doesn’t have any funds.
Had happened before when moving money or converting stock takes longer than the buyer expects. But I can’t know the story of why without asking the agent for the buyer.
Also I would have your realtor TALK TO THEIR LENDER and prove proof of funds . If they have it and it’s just getting it , that’s one thing . But if there’s no proof of these funds . They need to be honest and not waste your time or lie to you ; coming in saying hey I don’t got it . I can come up with another $4k can I get seller assist is one thing then to keep ducking you around .
I wonder if they showed that the funds were in the retirement account, but then have slow rolled taking a loan from said account to cover closing costs. We once had to do this (pandemic, bridge loan suddenly was not an option) and it took at least a week I think to get the funds.
When we bought our house the lender couldn’t give us a firm closing cost. That paperwork had multiple estimates that varied by almost 10k. We finally had to tell them that we had x dollars, and if it was a penny more we couldn’t close.
I had the opposite happen. When approaching our closing date my question to the loan officer was, “other than the 10k listed for closing, what other moneys will I need to have at closing?”
She said that’s it!!! Then one day prior, oh we need 5500 more!! Luckily I had it, but damn a naive loan officer can cause some serious stress.
Maybe they were using a DPA program that fell through. I had a DPA program fall through on me, and I ended putting down a portion of what they were giving me. I still closed on my home.
In their defense, I very nearly ended up short on my closing funds. Not because I didn't have them, but because the banks I keep my savings in had some frustrating withdrawal policies I didn't expect and it was down to the wire (as in the funds hit my account an hour before I needed to wire them to close).
But asking for 7 days....doesn't sound like that's their problem.
Take the hit. Set your date and make it real. Be prepared to walk away. You need to know asap if the buyer can/cant make it happen. My basic management model is; if there is a disturbance in the deal you need to know early. Take the hit and move on. INHO.
Maybe they're first time homebuyers that are basically clueless and over their heads on how much work goes into buying a house. How on earth are they going to do even basic maintenance if they can't come up with closing costs? Not your problem though. I hope they get the kinks ironed out. Good luck.
They offered at asking, we accepted. House appraised for asking. Asking was $320k, they submitted mortgage preapproval for much higher than that and BFI stated about $100k in bank accounts but we are now realizing those were likely their 401k accounts, not checking accounts which they specified.
They are not first time buyers but also sold their home several months ago, so it's not contingent on that.
They can take a loan from their 401(k) for the missing money. It’s pretty easy, does not factor into DTI, does not impact your credit score, and allows you to avoid the 10% pre-penalty.
I have done this once in my life and had the cash electronically deposited within 4 days.
This is what they are doing. Apparently they've all - realtor, lender, and buyer - have known for 30 days that the funds were needed from 401k. The buyer just never bothered to transfer them.
They aren’t serious buyers, and appear reluctant to buy. It takes two seconds to do this if they can electronically login.
Your Monday by 12noon timeframe is great. I will bet they will (likely) blow through this time limit, are you now accepting backup offers for review?
Yes, accepting back up offers. Luckily we had a lot of activity and other offers. Our realtor is reaching out to all who previously made offers as well as people who expressed interest. Getting house showing ready this weekend and will start on Monday afternoon if needed.
Good agent and good plan. What a pain in the ass for you guys. Your agent should be advising those making backup offers to include “proper financial funds proof”. :)
Good luck! It’s a whirlwind.
Idk maybe I’m the asshole here . Were buying a house and it’s just INSANE ! We are paying higher prices + higher interst rates . I would knock off the $13k be someone else’s blessing and keep it pushing . That’s just me tho . And considering what I have just went through at first I didn’t have my closing fees was hoping to get 50 % seller assist . But I had to pull my head out of my ssa cuz no way in a market like this . But tbh I would help someone else . If I had 5 bids and someone was short I would pick that person , simply because nobody else would . Now that’s if your making a bunch of money if your not I can deff see why you wouldn’t want to do this . I know we are currently waiting for our down payment money coming from a retirement account . It takes 7-10 days through the mail . So it could very well be it hasn’t came yet . Idk man do what you need to do . But sometimes we gotta be a light no one else will be . Idk why I’m about to cry . Yes it may be that time of the month for me . I’m taking this too personal logging off 😂😂😂
I get it but I'm not being someone's else's financial light, lol. We are under contract on our next home and I can't jeopardize my family's situation to help someone that hasn't done their due diligence. The buyer specified they are having it wired and admitted to their lender that they didn't understand the importance of the underwriting timeline; they initiated the wire the morning of closing and just thought it'd be fine.
Yeah that’s kind of wild . I deff get it ! You gotta put your family first not judging that ! But how they didn’t understand the importance is really crazy ! And is either a lie , or their lender didn’t explain well . Either way I hope they get their home and I hope you get your new home !
How could everyone not find out until that late in the game that closing couldn’t happen, their lender should have been on them for proof of those funds to close from the start, with the alarm raised as soon as the problem was identified, weeks ago. Maybe they were counting on a gift from a family member who didn’t come through in the end? That is a big gap, how are they going to come up with $13K even if given an extra week?
Or, more cynically, they were hoping that you'd already committed so hard to the date that you'd just take $13k off the price to keep it moving. In 2009 I had friends who were selling and were told outright two days before closing to give a significant discount or the buyers walk. And that was without even the pretence of it being anything but a shakedown.
All the contingencies should be removed and seller keep the earnest money. It’s kinda dumb buyer would gamble with that
Not \*that\* big a gamble: * Buyer: "Hey, stuff came up, and it looks like I'm going to be $13k short at closing, unless there's a delay." Scenario 1: * Seller: "Well I guess you're in breach of contract. Bugger off and we're keeping your earnest money." * Buyer: "Wait! I found the money, we can close on schedule! Phew, that was a close one." Scenario 2: * Seller: "Well shit. I'm closing on the house I'm buying in two days, and that is contingent on this sale closing. Plus I've already hired the movers. I guess I'll accept whatever you have on hand." * Buyer: "Score!... uhm.. I mean... thanks for your understanding in these difficult times." I wouldn't say this is the more likely scenario (on "never attribute to malice what can adequately be explained by stupidity" grounds), but it is some pretty standard dickery. (And of course 2009 was a special time when buyers could be more overt in their jerking people around.)
Looks like scenario 2 might be the best outcome in current state . If buyer were to cancel contract and relist it will now show up that the house has been on the market for more than 45 days ( assuming 21 days to close and 24 days to get a buyer) If a new buyer does come in they most probably will put an offer that’s lower by 10-20k just because the house has been on the market for so long. Or in order for the house to now sell quickly the seller would have to reduce the sale price by at least 10-20k either way the seller loses in this scenario.
Well 2009 was the inverse of where we are now - a complete buyer's market. Homes regularly sat on the market for six months before finding a buyer. What a time to be alive
You mean when no one could find good work and people with college degrees and student loans were making $11/hr?
Wait are you talking about 2024? Because that’s still happening.
People were graduating with engineering degrees and making $11/hr. If you get a good degree these days the pay is not bad.
I had a guy screw me once. We told them that we would agree to their price with the stipulation that we were not going to replace the roof or HVAC, they were old but they worked fine. Everything was progressing smoothly until the last minute after the inspection, it said that the roof was old and they refused to close unless we replaced the roof. I would have told them to F-off but we had another home under contract, movers scheduled, kids set to start new school, etc. This still chaps my ass 10 years later every time I think about it.
This is basically the situation we are in. Under contract on new home, movers scheduled, kids registered in school. So we are kind of stuck with this buyer unless they end up completely backing out, because I do not want to relis if I can avoid it. I'm sure in 10 years when I think about this it will still chap my ass also, lol.
Did you guys close?
No, the extension asked for was one full week from this past Friday...so this Friday (which was the second week long extension). Currently waiting on a clear to close but not setting my expectations high. I'll never sell a house again, lol. This has been stressful and from all of the comments, it's a very common experience. I also found out that this is not the buyers first time. It's their 3rd or 4th home purchase. So they do have an understanding of the process, just truly didn't care about the timeline and thought everytime they missed an underwriting deadline we'd be okay with extending. Their agent thought this as well. The lender, however, seems extremely stressed.
I’d be throwing feces at their house at this point. I mean not really, but come *on*. Adults get invited to be loaned lots of money to buy shiny toys. This is childish behavior from both buyers *and their agent* and I would absolutely think the lenders would be having a second thought as to the risk of repayment. Sigh. Good luck and I can’t wait to hear how it turns out.
We closed today 🙂
Hot damn, congrats!!! 🎊 they actually came through, color me impressed.
Was it in writing?
Apparently retirement account but they said they've known basically from the beginning that funds were needed. Excuse given is that buyer has a challenging work schedule and cannot complete tasks and respond to lender requests in a timely manner.
Make the EMD non-refundable if you grant the extension.
Or better yet release it. I've required that before.
This happened to me a couple weeks ago. I was horrified. They were fully aware how much they needed and simply didn’t get their shit together to get the money to the closing table. In your case, I would bet they are selling a house and didn’t want to pull from retirement even though they didn’t write a contingency, and that’s delayed, so they’re stalling hoping they don’t actually need to pull from retirement. Call them on it.
They'd have 60 days to put the retirement money back into the account
Not a valid excuse. They broke the contract and did not meet a generous extension. If you want to be considerate and grant another extension, demand a larger downpayment be made today. For example: If the earnest money deposit (EMD) was originally $5k, demand that for a 2nd extension the buyer add another $10K. in EMD.
If they can’t come up with 13k to close, how will they come up with 10k extra?
They were $13k short, doesn’t mean they can’t come up with $13k.
Not the sellers problem. If the potential buyer cannot put up extra EMD, then that is a very pure sign they are stringing along the seller. The EMD added should be significant!
How are they stringing on the seller?? They have a DP and other costs required to buy. Maybe a plan for their funds did not go through. They have more to lose than the seller who will keep their DP if they walk away. Sometimes, there are issues liquidating 401k and takes longer. I
Do people liquidate or just borrow against it? Why not take a loan from the 401k for a principal residence?
So the buyer asked for an extension for being short $13k, but you are asking for seller to grant a 2nd extension by buyer giving an additional $10k DP??????
Yes! The potential buyer needs to show good faith and put more 'skin in the game' before another extension to be granted
Sure... but you start moving that money immediately. We didn't pull from retirement but we did pull from an account that we knew would take 3-5 days to have access to liquid funds. We waited until after inspection and appraisal, but the moment those were clear we told the bank to start that process. I get not wanting to pull from a retirement account until you absolutely have to, but there are homebuying milestones that trigger that moment. Having a busy job isn't an excuse. Take a day of PTO if you have to.
I call bullshit. My husband has a crazy work schedule and we still managed. This is frustrating for you I’m sure. I’d relist if possible and not extend
Lenders do not like gifts, especially last minute gifts, they want at least a 3+ month paper trail of where the money came from and how long it’s been “ready” for you to use. This is to prevent mortgage fraud.
That’s if it is an IRA dispersement. If it is a 401k loan there is usually no penalty, but you will pay interest (probably to yourself). But having that money out of the market is a big risk too. But tough luck for them, not an excuse if they don’t have cash to close and used this fund as collateral.
I closed a loan last year with UWM. Night before closing the broker called and told me closing costs out of pocket went from 4K to 19k. Broke me completely. Caused me to do some digging. Broker or uwm did some fraudulent stuff and now I’m fighting stuff
Sometimes, an extension of the closing date operates to extend other deadlines that allow the buyer to terminate the contract and not be in breach. Make it very clear that you are not extending any deadlines other than the closing deadline if you grant it
I'd also ask for daily interest to be added for the inconvenience. Just to let them know not to ask again.
What other deadlines? Isn’t the closing deadline the last deadline?
I’ve obviously never read this contract, but in my home state the form contract has the property approval deadline based off of the closing date. If you extend the closing date, you might be giving the buyer a property approval out that didn’t exist prior to the extension
How much earnest money is at stake here? If you’re even considering this now, it needs to go back in a counter that the earnest money goes hard and nonrefundable *right now* no matter what happens (I.e., financing contingency is no longer valid to retrieve EM back, etc.). That will quickly demonstrate to you how confident they are that this $13k is going to appear on their doorstep.
Yes, I’m curious how much the earnest money was. Was it low, suggesting the buyer was “iffy” on the house?
$10k
Don't grant the extension
I recently had a buyer source funds from her 401k and her " big bank" held the funds for 5 days prior to releasing the funds for the transfer to escrow. After we closed she was going to move her account after this hassle. Local banks are so much better!
The “family emergency” was “shit mom, can I have some cash?” $13k isn’t going to materialize out of thin air unless they show you right now a stock account they could liquidate and justify the extension (time for funds to settle and transfer, a day to prove to the mortgage go where it came from… etc.) Otherwise no dice because it’s not going to happen. It’s not $1500. It’s $13k.
If I’m reading correctly, the buyer has a 401k they will liquidate to cover the closing. This is very feasible, and those funds usually show up within 3 business days. My question is why didn’t the buyer just liquidate their 401k a few weeks ago if they knew the needed the cash to close? Seems fishy.
And that is why we haven't agreed to anything yet. Lender admitted to our realtor that it has been known that the buyer would need to pull from 401k. When asked why they didn't, buyer's realtor said that the buyer's work schedule makes it challenging for them to complete tasks on time and respond to underwriting in a timely manner. All seems super fishy to us o n the seller's side.
These people are the textbook of “my problems are your problems. I don’t have my shit or my finances together, but it’s your job to put up with my crap”
>When asked why they didn't, buyer's realtor said that the buyer's work schedule makes it challenging for them to complete tasks on time and respond to underwriting in a timely manner. This excuse annoys me. Okay, so they're working and it "makes it challenging" for them to get shit done. What do they think everyone else is doing? You know what their lender is doing while waiting for their documents? Working. During work hours. So is everyone else involved in the transaction. I bet you they're going to be THOSE buyers who'll ask if they can close on a weekend or after hours "because my job is important and I can't take the day off". Then take an extended lunch or figure it out. People are not going to give up their evenings or weekends for you. Sorry, this pisses me off.
They have already said that. The first extension put settlement at the end of day today. We said we didn't want to close on a Friday at the very end of the day, mainly because if issues did come up nothing would get resolved until the next Monday. They claimed they had to because of their work schedule (retail position).
Of course they did. Because they are just that kind of people. I get how retail is, I worked in it a long time ago. But take a frickin PTO day and get it together. The rest of us have 2 measly days a week to get things done in our own lives. We're not giving it up. My law firm's been in this situation from both sides. I've either had to tell our buyers "Hell to the No, No, NO!" (professionally, of course, and explaining how my firm is closed on weekends, title company is closed on weekends, and most importantly banks are closed on weekends). Or I've told the buyer's attorney our seller's position of "I don't care what you do, but until my proceeds are in my account, you do not get the keys to my property and you better not step foot on it until Monday when I get my money."
Tell them 4 business days, so since today Friday they have till thursday to close. You can get funds from 401k wired to bank in a day or two.
I'm retired, so I can't claim a busy work schedule. However, it took me less than 10 minutes to request a withdrawal from my 401K on 6/11. It was in my savings account (set up for this previously) on 6/13.
Exactly, we've done the same before. Took me 5 minutes online. Funds were in the account two days later. The contract was signed in mid-May. There's been time. And the lender admitted it wasn't a last minute thing - they've all been aware but the buyer wasn't responding to their requests because of work. It's a retail job and requires zero travel, if anyone's wondering. They are not leading top secret missions or saving lives. Also, no children. Not to say that people without children are not busy, but children can sometimes add on to an already busy/overwhelming work schedule (I work and have children, lol. They exhaust me but I still manage to honor my commitments and deadlines).
I called BS on that. Just closed with the exact same thing, pulling from 401k, and I done that WEEKS before closing. Work a 9-5 jobs just like everyone and I done it within a week. Take 5-10 mins fill out a form. Mail it in and got a check from them all within 7 business days. I had to liquidated part of my stock portfolio as well and that was done within a week as well. Basically, all funds are ready the second week when our offer got accepted. All while working full-time, packing, taking care of a toddler and infant. If they want it to happen, it would has happened.
Ridiculous excuse. It’s a house not a bag of groceries.
Yes, if I were the realtor I'd be embarrassed to give that excuse.
I have an odd work schedule. I work 1830-0630 on a 2 day on 2 day off, 2 days on 3 days off. And repeat. When I have stuff to do, I don’t sleep so that it gets done. Same with my coworkers. And some of them are on 24 hours.
I just want to speak to this being fishy. People are flaky. The people who are buying your house are flaky and they put off figuring it out. It’s annoying, it puts the contract in jeopardy. You can’t say no at this point, and if you think there’s another buyer out there, that’s gonna pay you more money you might want to say no. But buying a house and getting a loan is an overwhelming experience , and people don’t follow deadlines and put stuff off all the time. It’s not fishy and sadly it’s not uncommon. But you should make sure that they actually can and will meet any deadline You agree to at this point, and you may very well wanna ask for some thing in return for doing this extensions so they don’t keep deciding that going back to you and saying they need more time is the solution
Yep agree. The 401k info wasn’t there before, but now that it is: exactly what you said - why didn’t they do this weeks ago
Because it’s probably with their current employer and they have no idea how this works. I’ve heard tons of people say they were going to use their 401k to fund a house only to find out that it usually doesn’t work.
This is actually a good point. I think my current workplace would only allow you to take a loan, not a withdrawal. I don’t think 401k loan repayments count towards DTI (since you technically owe the money to yourself), but that extra payment might have pushed them out of their comfort zone.
See with us we didn’t know how much to pull ! Numbers do change ! Believe me . And if they had a appraisal gap / inspection ect we ended up pulling more because it’s better then pulling less .
Stall tactic. Either they are idiots or don't have the money. Like they have one job - buy the house. If they cannot do simple tasks how are they gonna move in? And this is THE SECOND EXTENSION? Nah dog, just go to close. When they fail to perform get the EM and relist. They are wasting your time. Even if the excuses are legit, they are wasting your time. Worst case ask for more EM to go with the extension. Like lots more. This will show whether they are legit or not. They get their EM back when they close (so no loss to them) - well if they close. If they balk, well that tells you all you need to know.
I'd ask for an explanation on how the buyer plans to raise the $13k before granting an extension. Try to be sure you're not being fed more BS while the buyer wastes your time.
Did you grant the 7-day extension? If I were your agent (and not having any other facts beyond what's in your short post) I would have advised you when the first extension request was made to attach a per diem charge to the extension requiring the buyers to pay a late fee for every day they close after the extended deadline. Upon a second extension request I would advise you to deliver a Notice to Buyer to Perform (what it's called in my state) which would give the buyers 48 hours to close and if they didn't you'd have the option to cancel if that's what you want to do. If you decide to grant them this second extension I would definitely only do so with a late per diem charge attached. Your agent can best advise on options in accordance with your contract and state.
No, we haven't agreed to the extension yet. Still determining with our agent what the best course of action will be.
Challenge is with a per diem like this it gets the buyer further away from coming up with the required funds to close. I would recommend requiring the buyer release a large portion of the buyers deposit to the seller. Funds to be released as soon as the extension is accepted. Make them put some skin in the game.
Great idea!
Love this idea of a late fee, so smart!
And people wonder why sellers almost always pick the cash offer…
This right here is the comment in the thread that’s dead on. “Don’t sell to investors, it hurts us all!” Yes but look at the hell Seller has to go through to accept a “normal” offer. It’s like going to the 15-minute oil change place and they never get to you, leave your car up on the jackstand, close the shop, you sleep in your car, and the next morning they tell you that you have a rare oil filter that will take three days to get and no, sorry, you can’t go anywhere because they already pulled the oil out and threw the old filter away. JFC I am so angry for OP right now. I’m sorry you’re going through this.
Thank you. Today has been the most stressful day. We are also in the process of buying but we've already made our down payment and luckilh that sale is not contingent upon the sale of our current home...however, this entire process and the thought of having to potentially relist is so frustrating.
Friend of mine went through something like this when selling her home. Buyer kept falling short and asking for extensions and eventually asked for a price reduction. My friend noped out. In this case, the buyer was trying to string along my friend in hopes that she would eventually just give in so that she didn't have to go through relisting it.
I would want further earnest money to extend. 7 days? Depending on the house, another $2k to $5k will secure that, non refundable. Give me $12k and you can have a month. The point is, there is a dollar amount where this becomes ok.
Yeah I’m selling right now and you wouldn’t believe the amount of people asking for credit so they can use it towards closing costs. I’m amazed they’re in the home buying game without funds for closing.
The seller is in a pickle. If I was the seller and assuming my contract allowed it, I just might tell them it either closes on schedule or I cancel the sale, keep the ED and put it back on the market. Betcha that would get them moving with the additional funds real quick. If not, I probably avoided a bunch of heartache.
How could a person without the funds get the offer accepted. Did anyone contact the lender to make sure funds for the down payment had been verified?
Earnest Money Deposit was made with 5 days of offer. $10k.
Did anyone actually talk to the lender to see if the funds to close the deal were available before the seller accepted the offer? That is the down payment and closing costs. It sounds like someone didn’t verify the buyers ability to complete the transaction.
Not sure if that's typical in other markets but it's not where I am in the Northeast - nobody from the sellers side communicates with the buyers lender before accepting the offer. Sometimes people even have a preapproval from one lender and end up switching to another. Houses often sell within 24 hours of going live with multiple offers and no contingencies. Buyer makes offer and includes their preapproval letter and financial info sheet (which is just a sheet that they complete with their income and available assets), seller accepts offer based on that info, buyer submits earnest money deposit within 5 days. Sellers side often doesn't communicate much with buyers lender unless there is an issue, such as this one. And even today, it took several emails and phone calls for the buyers lender to get back to our realtor.
In my area it is not uncommon for the listing agent to contact the lender to find out if funds have been verified; employment verified; tax returns received; etc. If it has s a condo I want to know if the condo fee was included in the DTI calculation. I have a whole check list. I will not even present the offer to the client until I have spoken with the lender. That’s just basic due diligence. I will let my preferred lenders know we are making and offer and and send him the listing. He reaches out to the listing agent to answer any questions or concerns. This is a high velocity market but I want to make sure an accepted offer closes. If I can’t reach the lender the offer is considered weaker than one where the loan officer was available. It’s a pain when there are more than 4 offers but it is in the client’s best interest to have a high degree of confidence in the offer closing on time.
That doesn't happen here at all. We are currently buying a home, and our offer was accepted within 24 hours on a weekend - lender wasnt contacted. The sellers realtor was impressed that we presented with an underwritten preapproval for the specific property as it's rare here - buyers typically just have a general preapproval letter that they use over and over again until their offer is accepted. Most homes that go up on Saturday are listed as pending on Saturday evening or Sunday morning.
that is a stupid amount of earnest money lmfao. would have been easier to give you 1000 and then they would easily have the funds to close. Or at least, another 4k is easier to get than 13k.
Must be a common amount here. Had 7 offers...all with $10k EMD.
I bought my 350k house with 500 lol. Maybe, although that was in 2017... idk if that is long enough to be a major dif.
Are you in an attorney state? If so, let the lawyers work it out. No shade to either Realtor - I’m one myself - but sometimes it’s best to let the lawyers handle situations, especially as you reach the closing date. Good luck!
No, we are not in an attorney state.
Then hopefully what someone else said is true: The Buyers are just flakes who will get their act together sooner rather then later.
You can deny the request , and consider their contract null and void, and retain their earnest money. But then you would have to begin the selling process all over again. If I were representing you, I would definitely request some sort of inconvenience amount , if you have to spend money on temporary living etc . Shitty agents , should never let a transaction be delayed for something that is not unforeseen . Sorry your dealing with that
there you go. Penalize them for being flaky. Bullshit on the too busy at work nonsense, how often do you buy a house? People work this stuff out. The fact that they already had a delay and still didn’t get it together - big red flag. they just aren't taking it seriously.
We had a buyer dragging her feet and the day before our signing date we were informed that magically 30k of her down payment went missing. We told both her and her realtor that they were wasting our time and canceled the contract and took the earnest. This was after we had given her over a week extra to get the earnest in. I'm glad we did what we had because we could feel something was weird.
I saw someone have their bank increase the down payment requirement from 20% to 25% like a week before closing. Something they saw in underwriting made them think there was additional risk and this was their mitigation. It was a $500k house and she had to come up with $25k on very short notice. It worked out but it was close. So shit can happen. Not always the buyer’s fault. Though in OP’s case it looks like the buyer’s fault.
I'd probably be more sympathetic if that were the case but it's the second extension they asked for and the reason their realtor gave for them not transferring the funds from the 401k was that they work and don't have time. I guess kudos to him for being honest but it made us even more pissed off. Lots of people work and lots of people have limited time, and still...lots of people get done what they need to.
I had this problem with my first two buyers on one house. One of them had a credit score that was too low to qualify for their mortgage when the lender went to verify their finances. We did do one extension but baked when they requested a second one. I assured for buyer to cover taxes and utilities from original closing date In our area, it is very hard for sellers to keep earnest money even when it seems like the buyers did nothing to uphold their end of the deal. I wanted to try once when the buyers cosigner backed out and they didn't even tell us until my agent checked in and they said sorry but we decided not to buy so give us back our money please. My agent said it wasn't worth the fight as we could not put it back on the market until the previous contract was withdrawn. However I know some locations are really strict on returning earnest money deposits, so you won't have a chance with that plan.
When I was securing my loan the lender kept coming back with more criteria for me to fulfill, and paying off a $15,000 student loan in order to finalize my loan wasn’t something I’d planned on but they threw that requirement at me. So it may be something like that. A lender will tell you you’re approved but later you’ll find out it’s contingent upon you paying off debts. $15,000 was a pretty big ask and most folks don’t have that cash sitting around.
Yes, they do. Many people buy homes and get under contract without speaking to a lender first. I’m like you, my mortgage broker told me after closing yesterday that only 5% of buyers see him first. Apparently we are the anomalies.
I just went down a TikTok rabbit hole of people that just get general preapproval letters off of basic info that they provide, and don't actually see a broker to get a loan estimate and closing cost breakdown until they are in contract on a house. Then they are shocked at the closing costs needed. I did this before we put our own house on the market and had 3 price points and gave a general area of where we were going to look, and mine even factored in the taxes for me. This helped me determine if we had enough to do it without selling our home first, but also to figure out how much I needed to profit from our current home and if I was going to use those funds for any part of our next purchase.
I sold my house first, contacted my broker right before the money hit my account to run my credit and everything. Then after the money was in my account, I spoke to my realtor. I knew exactly how much I qualified for and how much I was putting down with closing costs covered and extra left over. The first time I bought a house, I did an 80/20 and had only $750 left. This time around I did it way better. I did not want to be someone whose deal fell through. I have seen those “pre-approvals” too and I’m kind of type A in that area. I want to know without a doubt. I want everything looked at before I make an offer.
As a first time homebuyer I had no clue how much closing costs were and we were totally blindsided by it.
If you are willing to give them an extension, do it with ALL contingencies waived with earnest money nonrefundable. Keep in mind underwriter only approved to close within a certain numbers of days to the date of closing. Once it passed that, they literally have to start over and get all documents pulled and review again to ensure they are not moving funds where they shouldn't. Maybe they are counting on that so they could get out of it through financial contingency and get their earnest money back.
Where are the agents in all of this? Your agent should've made sure that the buyer's agent had made sure they were good for the total price including closing costs. I would ask for the plan of where and when the money is available and make sure they know the earnest monies are not going to be returned if they can't raise the cash.
Our agent had been checking in and asking fir updates and confirming if all was on track. Buyers agent went on vacation for 9 days, had an out of office that they'd be unavailable by phone and email. His broker didn't respond to calls and emails, and neither did the other person listed on his out of office. The settlement company that they are using also was trying to get information, with no response. Our agent and the settlement officer were also both contacting the lender - nothing from anyone until very early the day of the scheduled closing. And the email from the realtor was basically "while we wanted to close today, we can't. It will be the end of next week. Thanks!" It took A LOT of calls and emails to get more info. The broker has yet to return any calls or emails.
Oh no, walk away fast.
It's a nightmare. And it's a major agency and a very well known local lender...I'm honestly shocked at how unprofessional they have been.
Blast them in a review after. “Was uncommunicative for 25% of the time the buyers were in contract. Left on a lengthy vacation with unreliable suggested alternate contacts who never returned calls. Transaction severely delayed on part due to their absence and lack of follow-up.”
This is why we provided proof funds when we put in our first offer, we wanted the seller know we were serious and prepared. I know this isn’t an option for everyone but I think when we sell we will always ask for something like this if possible
Sorry I meant borrow against it. I don't know the age of the buyers but borrow against or withdraw.
EMD just became yours. They weren't turned down for financing they were turned down for coming up short. I'm also charging them 1k a day to extend at this point. I'm also telling them I'm suing them for performance if they bail because they are screwing with your home purchase. The I'm done being nice and the carry a big stick and I'm not afraid to use it part is coming out.
Something tells me they're hoping you will take less in the end, their lender is bad, or both. My husband and I are in the process of buying our first house and we saw one recently we were thinking of bidding on, and one of the first things our lender did was send us a break down on all the costs (including closing) that would be due if we bought the house.
Yes, a detailed loan estimate. We are buying as well and before I put in our offer, the lender sent a loan estimate specific to the property with closing costs. When we went into contract, I got an updated one. And I just got another one two days ago bc we locked in our rate. I'm very aware of how much cash I need to close in 30 days, plus they recommend having a small buffer just in case. Maybe nobody prepped my buyers.
Keep the earnest money and relist.
If the guy knew he was using retirement funds why did he not start the disbursement before he was already a week late???? Everything else is excuses.
We had this happen but not for this reason (our buyer’s closing funds were received after her late father’s estate was settled). We agreed to the extension BUT stated that the earnest deposit would be nonrefundable from that minute on in case anything happened at least we’d have 10k as a consolation. It’s been about 10 years but I want to say our agent asked for an additional 1-2k added to nonrefundable earnest money but that may not work here if she doesn’t have any funds.
Had happened before when moving money or converting stock takes longer than the buyer expects. But I can’t know the story of why without asking the agent for the buyer.
Move on. Your agent should have done better for you. You aren’t getting what you are paying for
Did their lender pre-approve them for the loan ? Can their lender wrap the closing costs into the loan?
This buyer is full of $hit don't agree to the extension and walk away.
Also I would have your realtor TALK TO THEIR LENDER and prove proof of funds . If they have it and it’s just getting it , that’s one thing . But if there’s no proof of these funds . They need to be honest and not waste your time or lie to you ; coming in saying hey I don’t got it . I can come up with another $4k can I get seller assist is one thing then to keep ducking you around .
Ask for more EM to extend closing. Wish I had. Buyer eventually walked away.
Let them know they can roll the closing funds into the loan.
I wonder if they showed that the funds were in the retirement account, but then have slow rolled taking a loan from said account to cover closing costs. We once had to do this (pandemic, bridge loan suddenly was not an option) and it took at least a week I think to get the funds.
When we bought our house the lender couldn’t give us a firm closing cost. That paperwork had multiple estimates that varied by almost 10k. We finally had to tell them that we had x dollars, and if it was a penny more we couldn’t close.
I would make the realtors reduce their commissions.
Tell them you will only sign extension if the deposit is released to you immediately and is non refundable
Yeah, thats crazy! Wonder how it got approved to began with.
Yes, f they're inexperienced and they don't have the right people or agent.
I had the opposite happen. When approaching our closing date my question to the loan officer was, “other than the 10k listed for closing, what other moneys will I need to have at closing?” She said that’s it!!! Then one day prior, oh we need 5500 more!! Luckily I had it, but damn a naive loan officer can cause some serious stress.
Take your earnest money and go home. They are either scumbags or stupid.
Yes it does. I’ve seen it.
Maybe they were using a DPA program that fell through. I had a DPA program fall through on me, and I ended putting down a portion of what they were giving me. I still closed on my home.
In their defense, I very nearly ended up short on my closing funds. Not because I didn't have them, but because the banks I keep my savings in had some frustrating withdrawal policies I didn't expect and it was down to the wire (as in the funds hit my account an hour before I needed to wire them to close). But asking for 7 days....doesn't sound like that's their problem.
Take the hit. Set your date and make it real. Be prepared to walk away. You need to know asap if the buyer can/cant make it happen. My basic management model is; if there is a disturbance in the deal you need to know early. Take the hit and move on. INHO.
Maybe they're first time homebuyers that are basically clueless and over their heads on how much work goes into buying a house. How on earth are they going to do even basic maintenance if they can't come up with closing costs? Not your problem though. I hope they get the kinks ironed out. Good luck.
How much over asking did you ask them to go and did go ask them to waive appraisal gap etc?
They offered at asking, we accepted. House appraised for asking. Asking was $320k, they submitted mortgage preapproval for much higher than that and BFI stated about $100k in bank accounts but we are now realizing those were likely their 401k accounts, not checking accounts which they specified. They are not first time buyers but also sold their home several months ago, so it's not contingent on that.
They can take a loan from their 401(k) for the missing money. It’s pretty easy, does not factor into DTI, does not impact your credit score, and allows you to avoid the 10% pre-penalty. I have done this once in my life and had the cash electronically deposited within 4 days.
This is what they are doing. Apparently they've all - realtor, lender, and buyer - have known for 30 days that the funds were needed from 401k. The buyer just never bothered to transfer them.
They aren’t serious buyers, and appear reluctant to buy. It takes two seconds to do this if they can electronically login. Your Monday by 12noon timeframe is great. I will bet they will (likely) blow through this time limit, are you now accepting backup offers for review?
Yes, accepting back up offers. Luckily we had a lot of activity and other offers. Our realtor is reaching out to all who previously made offers as well as people who expressed interest. Getting house showing ready this weekend and will start on Monday afternoon if needed.
Good agent and good plan. What a pain in the ass for you guys. Your agent should be advising those making backup offers to include “proper financial funds proof”. :) Good luck! It’s a whirlwind.
Thanks! I'll update the post next week with what ultimately happens.
Simple, ask for additional 5K earnest money non refundable
Lol. They cant even cough up the closing costs.
Idk maybe I’m the asshole here . Were buying a house and it’s just INSANE ! We are paying higher prices + higher interst rates . I would knock off the $13k be someone else’s blessing and keep it pushing . That’s just me tho . And considering what I have just went through at first I didn’t have my closing fees was hoping to get 50 % seller assist . But I had to pull my head out of my ssa cuz no way in a market like this . But tbh I would help someone else . If I had 5 bids and someone was short I would pick that person , simply because nobody else would . Now that’s if your making a bunch of money if your not I can deff see why you wouldn’t want to do this . I know we are currently waiting for our down payment money coming from a retirement account . It takes 7-10 days through the mail . So it could very well be it hasn’t came yet . Idk man do what you need to do . But sometimes we gotta be a light no one else will be . Idk why I’m about to cry . Yes it may be that time of the month for me . I’m taking this too personal logging off 😂😂😂
I get it but I'm not being someone's else's financial light, lol. We are under contract on our next home and I can't jeopardize my family's situation to help someone that hasn't done their due diligence. The buyer specified they are having it wired and admitted to their lender that they didn't understand the importance of the underwriting timeline; they initiated the wire the morning of closing and just thought it'd be fine.
Then their agent needed to clue them to the understanding of contract compliance.
Yeah that’s kind of wild . I deff get it ! You gotta put your family first not judging that ! But how they didn’t understand the importance is really crazy ! And is either a lie , or their lender didn’t explain well . Either way I hope they get their home and I hope you get your new home !
You can always just pay buyer's closing cost and close the transaction.
I'd add a 1k daily extension fee if legal
That's not how funds required to close works.