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Saturday, September 17, 2005

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.

6 comments:

Steve said...

I live in Somerset County NJ, one of the wealthiest counties in the country; I fall somewhere in the lower end of upper-middle class, if that makes sense. I am looking at entering the fray; and am not sure were to get started. do I buy rentals for the long term, buy fixer uppers that need paint/carpet or other "minor cosmetics.", or buy a smaller home on a larger lot and construct a McMansion in an area where others have done the same. Seems like the latter may be a trend I am seeing, not only in Somerset Cty but in other densly populated areas of the country.
Thought?
Advice?
Warnings?

Is there a site that can give me info as far as construction costs for North/Central NJ?

Thanks,
Steve
Entry level REI

Shaun said...

Unfortunately, I can't give advice to specific individuals because: 1) I don't know your complete financial situation and 2) this is a general info blog. I suggest thinking about what you like doing. There are big differences between renting, flipping, and building and each requires different skills. Which do you like doing? What can you afford to do? I can tell you most people start off flipping houses to build up enough cash to buy properties that they then rent out. I would suggest looking at my posts regarding How To Get Started in REI and Guide To Buying Preforeclosures - the links are in the Key Posts section on the right.

Sorry, I don't know of any NJ construction websites.

Trisha#1 said...

Hey, Shaun,

Have you started your new job yet? How do you like it?

I agree with you--Friday is the worst day to schedule a closing. Invariably, someone forgets something, and no one knows what's going on by the time Monday rolls around.

Shaun said...

Nope, the new job starts Monday, so I'm on cruise control this week. I've got my exit interview in 15 minutes. My last day is Thursday, so I have Friday off.

Just spoke to the escrow officer and she is still waiting for the buyer's loan docs. However, she said the lender called and told her she should have them anytime.

I've decided I never want to close on a Friday, the 15th of the month, or the last day of the month. Too many people try to close on those days and escrow companies are just swamped. I think Wednesdays would be ideal, followed by Thursdays.

Anonymous said...

Steve,
I'm up in Morris Co NJ and I entered the REI fray this year myself. I write about it on my blog "D"igital Breakfast.

My suggestion is to join Garden State REIA for intro advice. I don't know of any construction websites off hand.

I run my investment analysis two ways, what I can fix and flip for and what I fix and hold for positive cash flow. My belief is that that fix and flip days may be nearing an end but I could be wrong.

Tom

steve said...

tom,
Thanks, I will add your blog to my readings. I found the gs rei site as well and have found it very informative.

Thanks,
steve

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