Once you’ve come to terms for a purchase or sale, you are then working toward a common goal with your counterpart in the transaction, the close of escrow. That is a mindset that works well for all parties when things pop up along the way that could otherwise provide an exit for one of the parties. Don’t overreact when a problem arises in the escrow; act together on an action plan that benefits all concerned.
Things will come up in an escrow that neither party anticipated. They can include repair items, credit bumps, timing issues, and even government shutdowns that stop any progress on some components of the escrow process. For instance, if a seller has a tax lien on the property, the title company needs a written demand from the Internal Revenue Service to know what it will take to clear the title so they can insure it. In the recent government shutdown, no one was “home” at the IRS when the escrow officers tried to get that type of information. Likewise for the U.S. Department of Agriculture loan processing people. Escrows were stalled.
When that happens, you can quit if it doesn’t close on time or work together to close as soon as it is practicable given the anomalous circumstances. Would you rather start over with a new buyer with a whole new set of unknowns or work with the one in hand that is already emotionally involved with your home and the possibility of owning it? Your agent should be able to help you with perspective for your specific situation to help you make an action plan.
If you have something occur that is a big financial impact, be objective while you assess the matter. If it needs a new roof, ask yourself what is reasonable. Is it reasonable for one or the other party to pay it all? Usually not, but it could be in a given circumstance. In most cases, it works out well for both if there is an amenable split and the escrow moves forward. If the buyer is getting a new loan, they might have to have the roof replaced before the close of escrow. If you are a cash buyer, then you can agree to a credit from the seller and close in a timely manner.
Credit bumps can take time to cure if they are bona fide. If it is a mistaken identity, it will still take time to resolve, but there is a good resolution available in a timely manner. Longterm credit fixes can be problematic in an escrow. It is better to have a prequalified buyer so you know before initiating negotiations that you have someone capable of performing.
Sometimes a seller runs into a problem moving things, i.e. large tools, trailers, etc. If you end up making an arrangement for them to leave things after the close for a period of time, be specific as to the terms of the agreement. The seller should sign a Hold Harmless agreement that holds the buyer/new owner harmless from theft and damage of the item. Also, have a time limit so it isn’t abandoned.
Our advice: As things pop up in an escrow they can seem like simple fixes, or insurmountable problems. It is important that you review all situations from all angles to make sure there are no unintended consequences from the resolution that is agreed on. Your agent can help you with such situational assessments. If you look at the matter from both sides, buyer and seller, you will find it fairly easy to come to a resolve that is beneficial to all. Remember, buyers want to buy and sellers want to sell. A problem can impact both sides emotionally and financially. Stay the course and work to close the escrow.
The essence of the real estate business is solving problems. Your agent can help you clear the hurdles that pop up in your path — what’s a hurdle to a hurdler?! Clear the hurdle and sprint to the finish. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless!
Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org