If all of my friends had been hiding in my apartment waiting for me to return home, the shout as I walked through the door would not have been as big as the SURPRISE that dropped on our lap today. It seems that Arlene is supposed to be COE tomorrow! And the appraisal came in last week, barely. We are quickly learning the downfalls of having an offer not based on financing even though we planned on financing. So in a panicked conversation with Partner, we discussed our options:
1 – Pay Cash
2 – Drop the Deal and lose EMD, Inspection, and Appraisal Costs
3 – Finagle with the Mortgage Broker and get them to process paperwork tomorrow.
1 – We can do 1, but it destroys our capital. It leaves nothing left and leaves us scrambling to cover part of the Closing Costs associated with 4243-ZS. So maybe.
2 – Well it’s hard to walkaway from almost $5,000! So we’d rather find another solution.
3 – Finagle, how can we accomplish all of our goals without coming even more out of pocket on this property.
So we drew up a plan for each option and how we planned on dealing with the situation tomorrow. Our primary approach; can we get the documents into escrow tomorrow? We won’t get an extension from the Bank or the Seller, so can we get into Escrow so that we don’t fall out of Contract? The lender has told us Wednesday. That’s 10/17! Two days too late. If they can’t, can we get an agreement from them, that if we go in with cash that they finalize the loan and repay us on Wednesday? That’s an option but we’d have to pull cash early and there’s a lot of Opportunity Costs. Third, we walk. We won’t go in with cash because it would cost us Zavala, and the costs associated with that property are much higher then the cost of walking away from Arlene.
Deep into the trenches of the bizarre Purchase Agreement I headed looking for some way to protect our EMD and other costs associated with Arlene. Lo and Behold, not only should we be able to squeeze two to three days out of the contract, but if we do fall out of contract, the Seller is in breach of said contract! Victory will reside on our side of the battle tomorrow. And whether it’s the crushing defeat that Alexander laid across Europe, or simply the Sacking of Rome by the Barbarians we will have to see.
Our protection is buried deep within the tidbits of contracts, like all good loopholes specifically:
Buyer shall have 14 calendar days from Acceptance to complete Buyer’s Due Diligence. Buyer shall ensure that all inspections and certification are initiated in a timely manner as to complete the Due Diligence in the time outlined herein. (If utilities are not supplied by the deadline referenced herein or if the disclosures are not delivered to Buyer by the deadline referenced herein, then Buyer’s Due Diligence Period will be extended by the same number of calendar days that Seller delayed supplying the utilities or delivering the disclosures, whichever is longer.) Acceptance date was 9/13. 21 days later we were to be at COE: 10/9. Due Diligence ended at +14 days: 9/27 Inspection was not completed due to Utilities not being supplied until 9/26. Well darn, we missed it by a day. But, but, but, and here’s the kicker: SELLER DELAYED SUPPLYING now, I have to check with a lawyer, but when the BUYER has to supply the utilities, that seems as if it’s a breach of contract. We follow it up with:
Acceptance of this offer is subject to the following reserved right. Buyer may have the Property inspected and select the licensed contractors, certified building inspectors and/or other qualified professionals who will inspect the Property. Seller will ensure that necessary utilities (gas, power, and water) are turned on and supplied to the Property within two (2) business days after execution of this Agreement, to remain on until COE.
All utilities have been provided by the buyer to facilitate all inspections/appraisals. Therefore seller is breach of contract. EMD, thank you, come home to daddy. But we don’t want that, we want 2 days to close on the property. Tomorrow we will know if we have enough karma to close this puppy out.
Tomorrow also starts pre-sale appraisal related repairs to Zavala.