Condo Certs Fees Seller Paid After Offer Received - Several Qs

[Wendy L.]

I posted this in the General Real Estate section, and then realized it would probably get more notice in the Henderson forum:

This is my first time selling a piece of real estate, a property in a gated community in Las Vegas, NV (I live in South Florida). Via my RE agent, I received an offer from two military veterans on November 25, which I accepted. Several days later, the title company sent me some Condo Certs links to pay for a "Full Resale Package and Disclosure" ($160) and a "Servicemembers' Civil Relief Act Disclosure" ($119). I signed a bunch of paperwork with a mobile notary at home and the closing date was supposed to be January 3rd. I got a message from my RE agent on December 21 that the VA loan fell through because one of the applicants did not have sufficient job history, and their earnest money was returned to them.

My questions are:

1) Did somebody jump the gun on the paperwork? (Why did I have to do all that paperwork when the buyer didn't have financing yet?) Silly me, I thought it was a done deal when I heard the closing date.

2) Was the "Servicemembers' Civil Relief Act Disclosure a legitimate seller's fee?

3) Am I going to have to pay for the HOA Resale Package again if I don't get another offer soon?

4) If I got another offer from a veteran, do I have to pay again for the Servicemembers' Civil Relief Act Disclosure?

5) Is there any type of financing offer I should avoid? (dear G-d please send me a cash buyer)

6) What usually happens with earnest money when financing falls through?

I know my RE agent should be answering these questions, but he talks in such circles that I don't understand the answers (and due to his hefty contributions with renovations and other wonderful qualities I admire, I cannot consider anyone else)

Thank you for any contributions you can make to enlighten me.

W

[Omar Merced]

Hi Wendy,

Sorry to hear that. It happens more times than I think people are aware. Having a good agent could definitely help reduce those fall outs. Thank you for your in depth question. I'll try my best to help.

1. You have to check the pre-approval letter and see how it was worded. You should be looking fo a fully underwritten approval letter with the property appraising and title being a couple of the  only contingencies.

It's not a done deal until it records. Literally as an agent the whole job is to make sure everybody is doing what they have to do to get to the glorious closing. It's like herding cats.

2. There are a couple of fees that the seller must pay in a VA loan. I'm almost positive it is, but not an expert, I'm sure someone will chime in. A quick google search got me here. It covers a lot more than just the VA loan.

3. HOA are jerks. But we need them because some people cant keep the property clean and kept up. Your HOA resale package is definitely is good for some time but I think the payoff will have to be reordered after a certain amount of time. But thankfully for you all you have to do is call your HOA and they will answer that.

4. Don't know and really don't understand why you were paying anything prior to closing...but I'll ask my VA lender that question and let you know.

5. This is generally the order of financing that as an investor I prefer:

Cash is King. But you'll have to give up some equity. These buyers know that and sellers should too. For example I can close before the end of year on your property but it would have to be at a discount.

Hard Money Loan. These are usually reserved for us flippers but some buyers that don't qualify for standard loan products so its almost as good as cash. Just have to jump through minimal hoops and usually there is 10%-50% down.

Conventional are the next best thing because the seller is putting down from 5%-20% down. These buyers will have a nice EMD and are usually more stable meaning that they don't "usually" flake.

FHA. These are the the majority of the buyers out there. As you can guess this is where the most fall out we see. The buyer only has to put down 3.5%. So sometimes they just have enough to do that and closing cost so if anything goes wrong they sometimes can't recover in time. Now of course this isn't everybody but just the experience I've witnessed. It all comes down to the buyer.

VA. Being a veteran I appreciate what they tried to do however the program has quite a bit of room for improvement. The buyer can get in with no money down. However I will say that the majority of VA loans that we accept get all the way through with no problems but it's about the team you have around you. The agent should now about VA loans or have the common sense to call the lender and ask all the questions about the flow and how to get to a successful closing. The lender has to know what they are doing because this program has it own set of rules that usually requires expertise. The best lenders usually has someone that only does these.

Lease Option /Seller financed. Sometimes this is the best way to buy and/or sell the house. This subject  is a whole three day course so what you need to know is don't do this unless you're working with an expert or are the expert.

6. EMD. Is whatever the contract says. If they released it without your signature they probably already have it in writing in the offer you signed. There is a loan contingency that is usually 14-30 days that says something like if the buyer can't qualify they are released out of contract with no damages awarded.

There are some things that I hope you and others learn from this. One is read and understand the contract and everything you sign. Everything is there and anything that is changed has to be in writing and if there are disputes the contract will be the document used to resolve. Two, you have to understand who you are working with and what is happening (to a degree). Regardless of contribution and character. At the end of the day this is your investment and you have to control the outcome. To do that you have to understand how it works. And if the person is not willing or able to break it down for you they're not the right person. And three, **** happens, deals fall out everyday, just reset, get back to it, and try not to make the same mistakes again. Hope this helped. Merry Christmas!

If your interested in learning more plug in to your local REIA. Just don't buy the course on the first visit.

I run www.SinCityREIA.com. If you're in Las Vegas on the third Thursday every month come visit.