Stuck in escrow because of a signature

[Ankush Ratwani]

Hey BP community,

I wanted to see how others would handle this situation. I am currently stuck in escrow as I have a 3/2 SFH under contract that was listed as an estate (i'm assuming passed down to the children as the owners have passed), and we are now currently 2 weeks passed the anticipated closing because one of the children will not sign the paperwork. My attorney and agent note that the sellers attorney and agent have been slow in responding/and giving minimal information on the situation. Our side of it notes that there is not much we can do at this point besides trying to keep reaching out. We could back away at any point and get my earnest money deposit back. I hate to lose this deal as its a good BRRRR that was a diamond in the rough, with the potential to get all of my money out of the deal and positive cash flow. I currently have a private lender (deed of trust) and a private loan that needs to be paid back so time is money. I also paid my contractor a deposit, which I can get hopefully get back if we back out.

How long would you guys wait for the signature before backing out? 

[Whitney Hutten]

@Ankush Ratwani That sucks!  I had a closing similar to that last year.  The property was inherited by 4 siblings, 3 wanted to sell, 1 got cold feet at the closing table.  While the deal was great, I too had sunk/holding costs.  

I would "fear set" this.  What is the worst that could happen if you waited?  Are you ok with the worst possible situation?  If yes, wait it out.  

If no, then do something.  Doing something could be just reaching back out and letting them know a timeline to complete the transaction (make sure you can get your construction deposit back or transfer it to another deal).  If the timeline is not complete, you will cancel the deal (since this weekend is a banking holiday, maybe give until Thursday next week so closing documents can be redrawn).  

There is POWER in making decisions.  Right now, you probably feel powerless to an extent.  There will be other deals out there.  In the end, I'd take a slightly different approach than Russell, as you are losing out on velocity of money right now heading into the sales season. 

Personally, I'd ask what do they need to close and give a polite deadline (not an offensive ultimatum). For my deal earlier, the deadline strategy worked, and I closed 3 days later.