Further Explanation Of The Delay

I just spoke with my agent, who spoke with the buyer's agent and I now have a better understanding of the problem. The issue isn't just a misspelled name. Apparently, many years ago, the buyer changed his middle name. The docs showed his former middle name and he signed with his current middle name. Nobody caught it until the lender was doing the final review of the signed documents. Given this information, I can totally understand the lender wanting to get this straightened out.

Anyway, the buyer has taken the entire day off work and he's ready to sign the docs the moment they arrive. The lender's funds are already at the title office and they are just waiting the lender's authorization to release them to me. Unfortunately, that probably won't come until tomorrow, after the signed docs have been overnighted back. We're hopeful that the lender will accept a faxed version of the documents to release the funds today and they won't require us to wait until tomorrow when they receive the originals.

Possible Delay Again

Well, I just got off the phone with the escrow agent and they still do not have funds yet. Apparently the problem now is that the lender is being a jerk. It seems the loan documents the buyer signed had the buyer's name spelled incorrectly and neither the lender nor the escrow agent caught it. The lender was complaining about this and wanted to get new docs, which means the buyer would have to sign docs again. Given the late hour, that would probably mean another 2 day delay, at least, to overnight the documents back and forth. However, the escrow agent said there is an "errors and omissions" document that was included in the loan package. Since the buyer signed his name spelled correctly on the paperwork, she is pushing to get the lender to correct the issue on their end as per the errors and omissions document and not require the buyer to sign new docs. The loan agent is going back to her boss with this request.

I told the escrow agent that I would give them another day, but she said she wasn't going to tell them that, in order to get some pressure on them to get this resolved.

I'm giving them another day because this delay is purely administrative - the buyer's loan has been approved and there isn't a chance of him being turned down anymore. Now, the lender is just being pretty anal about the issue. (The escrow agent said this is typical behavior for this lender.)

Another 1 Day Delay

I got a voicemail from my agent this afternoon and she told me the buyer signed his loan docs today - which means the loan will not fund until tomorrow, since the docs have to be overnighted back to the bank. But she was also told the bank has ordered the wire for the funds, so it should be all set to close tomorrow. I went ahead and gave them a one day delay. It sounds like things have finally progressed.

Another reason I let the buyer have another day was that today was my first day at my new job. The first day is always pretty hectic, so I didn't want another item to worry about.

Found the HUD error!

As I said before, there is always a mistake on the HUD settlement form - it's just a question of finding it. I originally thought this time was a rare exception, but it turns out I was wrong. There is a mistake.

A friend brought to my attention the fact that the $26 for four days of property taxes figure I gave seemed a bit high. Turns out, he was right and I made a calculation error. The actual amount is about $12 for four days. But in reviewing this, I discovered the HUD statement had me overpaying my taxes by $1. They listed the first half of the year's taxes at $561.31 instead of $560.31. OK, it's only a dollar difference, but still. I can stand by my claim that the HUD statement always contains errors! :-)

Update On Closing

I got a voicemail from the escrow agent and she told me she received my Cure Notice and has notified the buyer. She also spoke with the lender and he told her the delay was because the buyer's use of the property has changed. Now, I was told he was buying two houses and one was going to be an investment property and the other was to be his residence. He supposedly liked my property the best, so that was going to be his residence. The message the escrow officer left had it the other way around. Whatever the issue, she says we should close early next week. Well, that better mean Monday because that's the day the Cure Notice expires and I will have no qualms about putting this thing back on the market and keeping the guy's earnest money. He had a 30 day escrow period and now an additional week to get his loan situation straightened out. Of course, if it doesn't close and he wants another extension, I might be willing to give the guy another 1 week - but he will find the price of the house will have gone up.

Entering The "Cure Period"

Back when I listed this property, my agent told me Arizona Realtors have a new sales contract they use and it is very pro-buyer. Yesterday, I ran into one of those pro-buyer clauses.

At the end of the day, I still had not heard back from my agent or the escrow officer, so I called the escrow officer and spoke with her. She had still not received any loan docs. I told her as far as I was concerned, the buyer was now in breach of contract and has lost his earnest money deposit. She told me that I needed to submit a Cure Period Notice. I had no idea what this was, so I called my agent to find out.

Now, keep in mind the contract addendum I signed extended the close of escrow date to Sep. 20th. It was now Sep. 21st and escrow was still not closed. It seems to me this is a pretty clear case of breach of contract.

Unfortunately, this new pro-buyer contract has a provision that, should either party not meet the terms of the contract, they must give the other party an opportunity to "cure" or correct any problems. This is known as the Cure Period Notice. The cure period lasts 3 days. Had I know this, I would not have agreed to extend the close of escrow date and instead would have just started the cure period. After all, they wanted a two day extension and the cure period is 3 days. But I didn't know that and now the buyer has until Monday to get his loan issues straightened out. If it doesn't happen, the house goes back on the market and I get his $2,000 earnest money deposit. At least, I hope I do.

Another pro-buyer provision in the contract is that a failure to secure a loan is not considered non-compliance with the contract and so the earnest money is refundable. Fortunately, we also specified that the earnest money was non-refundable after the inspection period ended. My agent assures me that this will override the other part of the contract which says it is refundable, but it's not really something I'm looking forward to testing.

Delayed Again

Apparently, this house was not meant to be sold quickly. Everything I have attempted to do with it has been delayed.

Escrow was supposed to close today and this morning, I called the escrow officer. She said the buyer's lender had spoken with her and told her she would have the docs "very soon." The day went by and I got a call from her this afternoon at 5:00 PM. She still didn't have the docs. The lender said she would have them tomorrow. This is the same thing he told us Friday.

So I called my agent and let her know my displeasure. She called the buyer's agent and got her voicemail, so she left a message indicating that I wasn't happy. We're going to give them one more day only, and I am not going to sign another extension. If the loan doesn't fund tomorrow, the house goes back on the market and the buyer loses his $2,000 earnest money deposit. (I'm glad we made the deposit non-refundable after the inspection period ended.) Based on this, I expect to hear something from the buyer fairly early in the morning.

Closing Has Been Delayed

The buyer's lender did not get stuff done in time. The loan is still going to go through, but it is "in line for funding," whatever that means, instead of "funded." So our new closing date is Tuesday, although it could close as early as Monday.

The buyer had his final inspection and everything was ok except for no hot water. The house has an electric water heater and I know for a fact the circuit breaker for that is turned off. I don't know why it is, but I know yesterday when I was out there, I had to check the circuit box to make sure the blanks were installed, and I noticed that one particular breaker was off. Since I didn't need hot water at the place, I left it off. We told the buyer and they are ok with that.

Also yesterday, I picked up my lockbox, hid the key outside, and put the other copies of the keys inside. My agent passed this info on to the buyer, which is when they went to do their final inspection.

One thing I am curious about is that my HUD settlement shows I am paying the property taxes up through Friday. With the extension, there are now another 4 days of taxes due while I own the place. Since the delay was not any fault of my own, I don't think I should have to pay the additional tax. I'm curious to see if the escrow company modifies the HUD settlement document to show this. It only amounts to about $26, so if they don't, I'm not going to make a big deal out of it. However, it will be something I keep in mind for the next time. The extension was done just as a contract addendum, so if I run into this situation again and the delay in closing is not my fault, I'll counter the addendum and include the request that the other party is responsible for taxes beyond the original close date.

I never want to schedule a close of escrow on a Friday again. If some problem comes up (and one usually does), nothing can be done until after the weekend is over. Rather than stress out over the weekend, it would be nice to have a business day the next day for things to get resolved.

Escrow Closes Today - Theoretically

I just spoke with the escrow officer and she emailed me a copy of my HUD settlement statement. Everything looks OK, which is pretty shocking given that there are usually always errors on these things. The statement only reflects a 70% investor discount on the title charges, but she is waiting to hear back from the company I purchased title insurance from when I bought the property. Once they confirm my old policy, the discount will go up to 80%.

Her only opening for a signing time today is 3:30 PM, which doesn't really work for me. I'm to blame for this, since I neglected to set up a signing time in advance. But, since her office is pretty far from me, she said she could email me the documents and I could sign them. There is only one page that needs to be notarized, so I will have that done when I go out for lunch today. Then, I'll call her and she'll send a courier to pick up the papers.

Based on the preliminary numbers, it looks like I'll be making around $25,000 on this property. I'll do a more detailed analysis once everything becomes final and the money is in my account.

The reason I say the closing date is theoretical is because she has still not received docs from the buyer's lender. Additionally, she is having problems with her email (which is why I never received the HUD statement she emailed me last week), so who knows if everything will come together today.

Rejected For Office Depot Card

Yesterday I received another rejection notice, this time from the Office Depot credit card I was trying to get. Again, I'm not too concerned about this, since I won't really be needing credit anyway. I still have not heard back from the cashback credit card offer I sent in a while ago. I'm thinking I'll get it because I believe I had to offer a personal guarantee of financial responsibility on that one. These other two cards I did not (but I was given the option to).

The Handyman Returns

When I was going over the work that needed to be done on the property, my handyman told me he had an assistant who was going to work on replacing the dry rot on the patio enclosure. He gave me his number and last night I called him, in an attempt to find out the status of the job. When I initially talked to him, he wasn't sure who I was, but he did tell me that my handyman had returned from vacation Monday night. So I called and left another message for him.

Yesterday, the assistant called me back and apologized for not knowing who I was earlier and then told me all the work on the property was done. He said the venting was done, the window was replaced, etc. This was good news!

This morning, I went out and checked on the property. What I found was pretty upsetting. Only about half of the items on my checklist were done. The two vent pipes were not fixed, despite what the assistant told me. The electrical box did not have blanks installed. The master bedroom ceiling fan and lights did not work. Caulking around the master bath shower was not fixed. In addition to this, there were more things that needed to be fixed: the master bedroom door strike plate was adjusted and the door closed correctly, but one screw was missing from the doorknob, so that was loose. The handle to the screen door leading to the back patio was missing and the screen was ripped in two places. I also discovered the air conditioning was left running and there was a hose bib in the back that was dripping. Those things were probably going for 2 weeks, so that will raise my utility costs.

I called the handyman this morning and left a pretty angry voicemail. At the time I was leaving it, he called me and left a message for me. His message stated all the work was done, according to his assistant - the same thing I was told. However, in my message to him, I listed all the things that were not done, plus the new problems that needed to be fixed. I told him I was pissed that I met with him over two weeks ago and he told me the job would take 1 day, yet over two weeks later, it still wasn't done. I demanded he call me back today to explain what was going on and that I wanted the work done by 5 PM tomorrow, since escrow closes the day after that.

About 30 minutes later, I got another message from him. (I missed the call because I was talking with some co-workers about my upcoming departure.) His message said he was sorry things weren't done. He thought he had things covered when he left for vacation, but apparently he didn't. He said he would go over to the house today and get everything done, then call me this evening with a report. He also said there would be no charge for all the work.

We shall see...

Where Is The Handyman?

Escrow is supposed to close on Friday. I met with my handyman two weeks ago to go over the work that needed to be done. He told me it would take 1 day and that he could start the following day. He did mention he would be on vacation last week, but that still left him a full week before his vacation to get the job done.

I've called him Sunday, Monday, and today. All I get is his voicemail and he hasn't returned my messages. I haven't had a chance to go over to the house yet, so I don't know if anything has been done. This will probably be the last time I use him.

Escrow On Track

I called my escrow agent yesterday to make sure things were on track for our closing a week from today, since I haven't heard anything yet. She said she had everything she needed from me, short of my signature on the closing documents. She is just waiting for some loan paperwork from the buyer's bank and then we'll be good to go. She said I could go ahead and come down and sign everything, but I said I'd wait until the buyer's docs arrive. No point in signing if for some reason, the deal falls through. I did ask for a copy of the HUD settlement statement to be emailed to me though.

I also called my handyman this morning to see how things were going. I got his voicemail and left a message.

New Rat Race Job

I accepted a job offer today at a new company and gave my two weeks notice to my current employer. I'm still in the rat race, but at least I'll be making a bit more money and have better benefits - plus the coolness factor will greatly increase since I'll be working at a company that makes video games. The raise will allow me to save more towards passive income investments, which puts me one step closer to leaving the rat race. It will be very tempting to spend the extra income (especially considering salaries at my current company have been frozen since I was hired almost 5 years ago), but I'm confident I can keep the spending under control. What the new job will mean, however, is less time available to research new properties. I'm currently lucky in that I have a fair amount of "free time" at my current job to do research. That will change. Unfortunately, I'm scheduled to close escrow on my current property about 10 days before I start my new job, so just when I'll be ready to look for another property, I'll not have much time to do so. Any Phoenix area birddogs out there?

Rejected For Lowe's Card

As part of my efforts to build credit in my company's name, I applied for credit cards at Lowe's and Office Depot, as well as the 3% cash back credit card offer I got in the mail last week. Today I received a letter from Lowe's (actually, from GE Capital Financial, who runs the Lowe's credit card program) saying my application was rejected because my company did not have a Dunn and Bradstreet credit file. Lowe's was supposed to be an easy card to get. Oh well! One down, two to go.

Truthfully, I think I am only trying to get credit for my company for purely academic reasons. Since this company pays for everything in full, it really doesn't have a need for credit. But learning the process will help me with future businesses that may need it and that is why I am trying.

Just As I Thought

When my handyman told me fixing the items on the buyer's Inspection Report would take 1 day and that he could start Tuesday, I knew there was no way that would happen and I figured it would really take him three days. Sure enough, late yesterday afternoon (Wednesday), I got a call from him saying he hadn't started yet, but he was going over there now to start. He asked again when escrow was closing and I told him a week from Friday, which is the 9th. Actually, it closes a week after that on the 16th, but I want him to hurry.