short sale contract problem

**willywuu** · 01-21-2010, 07:54 PM

I'm buying 1st home & trying to learn the lingo. Our purchase contract accepted by lender said they would pay for the termite inspection & 3% of closing costs. Our Buyer's Estimated Settlement Statement had the termite report costs charged to us. I complained to our realtor & she was told it was being taken off. I paid final closing costs today( in anticipation of closing on Monday 1-25. I asked the escrow officer about the charges & she said the lender only wants to pay for 1/2 the termite work & we are responsible for paying the rest. She said the lender can do what they want in a short sale. This sounds like a breach of contract. I'm a high school math teacher & am having trouble understanding the fees being charged. Any ideas on my next step?

**FBofficesapace** · 01-21-2010, 09:05 PM

I guess you need to get an attorney to study the contract you have signed. To explain what are the terms about the property's conditions. I guess,if you're the buyer,everything should be in good condition before closing the deal.

**Greg** · 01-22-2010, 06:25 AM

Originally Posted by willywuu

Our purchase contract accepted by lender said they would pay for the termite inspection

I asked the escrow officer about the charges & she said the lender only wants to pay for 1/2 the termite work & we are responsible for paying the rest.

You are talking about 2 different things here. The termite inspection and the termite work.

If what you are referring to is the termite inspection then the cost is so minimal it is not worth getting upset over.

If the termite inspection found termites and remediation is required then the cost could escalate.

Hiring a lawyer in this situation is most likely cost prohibitive. Hiring a $500 lawyer for an opinion on a $1,000 repair or hiring a $8,000 lawyer for to sue over a $1,000 repair doesn't make sense.

The reality is the sellers lending bank has to approve the sale but they are not really a party to the contract. If they refuse to do the repairs, this would cause the seller to breach the contract. In a contract breach you have 3 options, 1. pay it yourself 2. let the deal die 3. sue the seller for money they don't have (remeber the short sale part)

Only you can decide if the cost is worth it. I would hope you are getting a real deal with the shortsale so this expense can be seen as tivial.

Congratulations on becoming a home owner.

**mWoods** · 01-22-2010, 08:47 AM

Unfortunately this is how banks roll sometimes. I am not trying to sound nonchalant but it's the truth. They did pay the 3% as agreed correct?

**willywuu** · 01-22-2010, 07:56 PM

Thank-you all for your input. Our funding was approved today & we are probably signing closing papers on Monday. I'm going to try to ask the funding loan officer what is going on, since the escrow officer already gave her view. The termite work totaled $3800 & it certainly burns me that a business entity can ignore a contract that they expect me to uphold.

**BoiseRealEstateSoup** · 01-26-2010, 08:18 AM

Originally Posted by Greg

The reality is the sellers lending bank has to approve the sale but they are not really a party to the contract.

I'm glad you pointed this out Greg!

Most people get really upset at the bank's activity during short sales, but soon forget that the banks name is not on the Purchase Contract.

Most Purchase Contracts in a short sale say, "subject to lender approval" which in fact means that all pre-determined costs, fees, terms and conditions are in fact subject to lender approval.