Dear Michael: We are selling our home. The buyers did not remove their loan contingency within 17 days as agreed in the purchase agreement. They are now asking for an extension is a delay on the loan approval common on a real estate purchase?
Answer: With tighter lender regulations it is increasingly common that a buyer will need longer than 17 days to remove the loan contingency. The fact is that mortgage lending is a 25 to 30 day process (condos can sometimes take longer to approve than Single Family Residences). This delay is usually at no fault of the buyer, nor is it related to the credit risk of the borrower. Even the strongest loan files need to go through the same process: from initial disclosures, then appraisal, then loan approval and from there to loan docs. These steps cannot be avoided nor rushed. All that said, buyers can get a conditional loan approval within the 17 days. It may not be enough to make the buyer comfortable with removing the loan contingency, but it does provide the seller with indication that progress is being made. Try requesting an update directly from the buyer’s loan agent as a condition for extending loan contingencies.
Dear Michael: We are in escrow on an older home in which space restricts the possibility to have the furnace vents duct fixed up to code. Therefore a new furnace will need to be installed in the attic instead of the basement where it currently is. We made a request to the seller to pay for half of a new furnace and were told that only a partial credit will be credited to us at the close of escrow. We are not pleased with the seller’s response, can we keep requesting? And at which point do we settle?
Answer: Your request is a legitimate one. A furnace needs to be up to code. The questions is: at which point are you willing to settle or walk away from this purchase? Only you can answer this question. This is a seller’s market. Inventory is at a historical low. There is a surplus of buyers compared to the few sellers. Chances are that your seller has a back-up offer. I suggest you give it one more try! Have your agent re-submit a request insisting that you get credited for half the furnace. It is worth a try. Some seller will not want to risk having the purchase cancelled for the cost of half a furnace.
Dear Michael: How should I go about transferring a duplex that I own free and clear to my adult grandson and granddaughter? I no longer want the responsibility of taxes, etc. Please give me your professional opinion as to the best way to transfer this property to them. Would it be considered a gift? Thank you for your advice.
Answer: A “Quitclaim Deed” is a term used to describe a document by which a person the “grantor” which is you in this circumstance, disclaims any interest you have in a piece of real property and passes that claim to another person the “grantee” which in your case are your grandchildren. By contrast, the deeds normally used for real estate sales called grant deeds, contain guarantees from the grantor to the grantee that the title is clear. The exact nature of the warranties varies from jurisdiction to jurisdiction. “Quitclaim Deeds” are usually used for transfers between family members. I am sure that you will want clear title before you deed your home to your heirs. I suggest you play it safe by running a title search on the property in order to make sure it is not over encumbered with any liens. Liens can sometime appear without your knowledge.
Michael Kayem is a Realtor with Re/max estate properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com