Currently have a deal in the works. It's more than double my last purchase, and that one I got somewhat led by the nose throughout, and it brings some concerns with it. The main concern is his relationship with current owner - friends for a while.
1.) Agent seems to know the current owner quite well. He brought me the deal before it even hit the market. I have been working with the agent for a couple months, and he seems like an upright guy, but he told me today that as a representative to both parties, he doesn't have a fiduciary responsibility to either party. He stated that he is legally unable to harm either party, but doesn't have that fiduciary responsibility. Nothing he has done seems unnerving or anything but honest to me, but is there anything I should look out for?
Example: She wanted to list the house for $575k, but after a couple talks with her, he said she wants to work with me and he recommended that I come in at $540 to start and see if she counters. This seems very honest of him.
2.) The house was denied wind insurance from the current insurer due to the condition of the roof. The seller is replacing the roof prior to closing. However, would I lose my deposit if my lender refuses to lend prior to the 30 day period because the roof hasn't been fixed yet? We are setting closing date for last day in September for various reasons, one of which is getting the roof fixed. Based on the purchase contract, if, outside the 15 day inspection period, my lender denies me the money, I would forfeit my earnest money deposit (from how I read it).
3.) Is it acceptable to provide the agent with a purchase contract or standard to use the one he provided? I can't understand all the fees that I am paying and the seller is paying.
Example: I don't see commission listed anywhere.
4.) I have a couple connections to RE agent friends. Should I impose on them to review the purchase contract and make sure there is nothing hidden I am missing? I hate asking for help without providing anything in return, so I'd prefer NOT to do this, and it seems bad form to offer a small fee to them, but if it's recommended, I'll do it.
I appreciate any and all help regarding this matter.
1) That’s the basic relationship, Transaction Broker, 90 plus % of the time anyway.
2) make your contract, Including inspection dates, final financing and closing dates tied to the completion of roof, a passed Final Permit Inspection.
3) The commission is not detailed in your purchase contract. Your lender will show you the majority of your closing fees, which are detailed as to who pays which closing fees in the contract. Your lender has their own fees.
I haven’t read the last FARBAR version in detail, but in prior versions: if the buyer doesn’t obtain financing approval by the date set in the contract, usually 30-45 days, then Either party may cancel the contract, in writing.....no automatic loss of EM. If you get Denied financing in that time period You can cancel and get your EM back. Also, it provides you can cancel up to 7 days prior to closing due to denied financing and get your EM back.
But again, tie all of Your required dates to the completion of the roof.
Thanks for the info. Like I said, he's been nothing but forthright with me, just made me a little leery. I had looked at a contract I saw an investor who blogged on here used and it listed RE agent commissions, so I assumed it was standard to see that listed. Lesson learned.
I ran it by the agent and said I'd like some language protecting me in case the roof isn't fixed in a timely manner as it may prevent lender from giving the go ahead. Sounds like that will appear in the next iteration before it's sent out.
The first home purchase I made was two years ago and I didn't look closely at much that I signed. Trying to be smarter about it this time. Some of the language made it seem like I could lose any deposit made (sizable - one of the reasons I believe the seller wants to work with me) after the 15 day inspection period if I was unable to procure funding by 30 days. We won't be closing for two months per the contract, and I feel much more comfortable about things after having some questions answered.
Again, thank you!
@Daniel Winsor Just make sure the language regarding the roof repair being tied to your required performance are Clear, not vague. Also you may want to add some language that if the roof repair date (passed permit Final inspection) gets delayed and causes you to pay an addional fee for a rate lock extension, the seller credits you at closing.
I would create this language Yourself as opposed to some vague thing they come up with.