How Do You Extend An Escrow When Financing Has Taken Too Long?
Wednesday, January 16, 2008
When you fill out the purchase contract, put under additional terms:
“If, through no fault of buyer, financing should exceed the escrow period, escrow is to be extended to accommodate same.”
This gives you an open window if financing is taking too long. One time, many years ago, I had a seller back out because of pressure from his ex-wife and her family. When the loan company was late (not unusual) and the escrow was scheduled to end, the seller decided not to allow an extension for a 1 week period and exercised his right to cancel and did.Since that time I have always put the clause above in my purchase contracts.
Sometimes, the seller will come to you and say he needs a finite time put on the clause. That’s fine, in this case I make sure to allow myself at least 30 days. This way I still have a month for any unforeseen circumstances.
I’m sharing my experience of what has worked for me. However, each real estate transaction is different. Therefor, this may or may not be suitable for your deal.
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Thank you so much for this tip!
Last month I lost my good faith deposit because I wasn’t able to obtain financing that the lender promised. My loan contingency had passed and the seller wasn’t willing to wait, so there was nothing I could do!
I’m definitely going to use this in my next transaction.
Do you have any tips on how to obtain hard money? I hear that they fund faster, is this true?
Comment by Joshua Jordan »