Time is of the essence clause?

Question

Hi everyone,
I don't know if this is the correct forum for my question, but here it is. I made an offer on a house to reside in. the ofer was accepted. the closing date on the offer was for 2/13/09. since the offer was made i found out that my lease isn't up on 3/1, that it's actually up on 3/31. i have until tomorrow to accept/reject the offer. i want to push back the closing date to 3/13 b/c of this. the issue is that the contract has a 'time is of the essence' clause in it, w/ a per diem of $100 per day to be charged to the buyer should the closing be delayed. i live in norfolk, virginia. what can i do? please help.

thank you

Tiese C. · Answer

Thank you. I've just signed a release agreement & my agent put the reason as: counter addendum from bank unacceptable to buyer. Now, I'm going to ask her to make sure about the deposit. She said she still has the check, though. I also asked her about resubmitting the offer w/ the closing date that I really wanted on Monday.

Jon Holdman · Answer

If the bank accepted and signed your offer, you'll have to have some justification for withdrawing your offer or you will lose your earnest money. Assuming you had an inspection contingency in the offer, you should be able to use that to get out. Buy you will probably have to pay for an inspection. Be sure to discuss this with your agent so you don't lose your earnest money. The, yes, I would resubmit a new offer.

Tiese C. · Answer

My agent told me that the offer that I made, that the bank accepted...the closing date can not be changed. So, I'm w/drawing my offer. My question is should I submit another offer on Monday w/ the closing date that I actually wanted?

Calvin N. · Answer

If you want the property then, yes, make the offer with the closing date that you really want. All they can say is no.

Tiese C. · Answer

Okay...a mortgage broker is processing the loan, not the bank. I'm using a VHDA/FHA plus loan. Now, this is the latest: my agent tells me that she doesn't believe that the bank will accept me wanting to change my closing date. Truthfullly, she's making me feel as if I must close next month so she'll make some kind of 'employee of the month'. Something like that. Now, she's also told me that the lender is going to send out an appraiser after the inspection. Some of the items that he will check are the obvious, plus the faucets. I, personally, did not know that this would be included. Of course, the faucets won't be working due to the known plumbing problem. Then she says that the lender may not 'approve' the loan b/c it's not in 'livable condition'. That statement just totally thru me for a loop! Of course the house is in need of repairs, that's what the inspection will tell me. I told her that if the bank can't accept the closing date being pushed back, then I don't want the house. So, she suggested that I submit another offer the beginning of February, but run the risk of the bank rejecting it. I hope I explained everything right. I'm mentally exhausted with the process, but I'm thankful for it...b/c it's free learning. As of now, 8:40 pm, est...I haven't heard back from my agent. When we last spoke at 5:45 she said that she was going to try to speak to the agent to see what could be done, if anything.

Jon Holdman · Answer

Yes. The accepted offer is really just the starting point. After the inspection, which will undoubtedly find problems, you go back to the seller and ask for an adjustment in price because of the problems. If its a REO, they may not be willing to adjust for obvious problems, so choose non-obvious ones to complain about. Please report back on your response. I gather you're asking the bank to provide financing, and 100% at that. I'll be surprised if they do that, so let us know what they say.

Jon Holdman · Answer

You need to have the house professionally inspected. I know in some other posts I've questioned the value of inspections. But this is a new thing for you, and the inspection would be very valuable. You do the inspection after the offer. You need to have the electric and gas turned on for the inspection. Since its clear there are problems, use the inspection to renegotiate the price.

Tiese C. · Answer

Thanks Jon for responding. But will I still be able to negotiate the price, even though I have to accept/reject the offer by midnight today? The house is $89k, I offered $85k, 100% financing, bank paying closing cost & down payment. I have already contacted an inspector, so just waiting to hear back from him, as well as, finding out if the bank will accept the offer. I thought that once I accept the offer today, that I can't change the offer, even after the inspection? Also, I had someone else look at the home last night and he stated that the plumbing is not as bad as the contractor from the day before said.

Tiese C. · Answer

Well, the house has a new roof and windows. The only issues that I know of b/c I've had a few people come out and look at it...is the plumbing. Of course, I won't know about the electrical and heat until i get the inspection. The same thing you mention is what my agent mentioned. I just wanted to benefit from a month of not paying a mortgage/rent. That was another reason I wanted the 3/15 closing date. In about an hour, I'm going to have someone else look at the house to give me another estimate on repairs and time. Of course, b/c the house is empty, we don't know about the electrical issues, as well as, heat.

John Andre · Answer

If the house is not in livable condition, will you still need your apt. while rehab is done? That might give you the month we are worrying about.