I received an offer from another agent on one of my listings last week. It was a clean and respectable offer. My clients agreed to accept the terms and place the home under contract. Two days later I get a call from the buyer's agent.
Buyers Agent: "Hey, did you ever receive an FHA addendum for our offer?"
Me: "Uh, what now? FHA addendum? No I did not."
Buyers Agent: "Oh, I must have forgotten to send that to you, I will get it over to you to have your clients sign, we just need $2500 in closing costs."
Me: "Oh, well that is a game changer. You know, my clients aren't expecting that since you didn't send it with your original offer."
Buyers Agent: "Well I meant to I must have just overlooked it."
So the moral of the story: DON'T FORGET TO SEND ALL YOUR PAPERWORK IN THE FIRST VOLLEY OF THE OFFER. Otherwise, you will have some disappointed parties on your hands especially if you send the paperwork AFTER you put the property under contract. Remember, in this business the devil is in the details.
Jeremy, I have two questions. First, with so many FHA loans closing these days where sellers pay buyers closing costs and buyers getting into homes with little to no skin in the game are we headed for yet another round of loan defaults, foreclosures and short sales. Second, if the FHA addendum was not mentioned on the original offer, signed by the seller, who is ultimately responsible for the closing cost? Did it kill the deal?
ReplyDeleteMr. Lungz,
ReplyDeleteGood questions. Here are your answers:
1. It would seem that with little skin in the game the incentive to default is much higher than with folks who put in significant downpayments. However, most defaults occur due to job losses or medical problems. With most people who are going to be out of work already out of work, the risk of more foreclosures on these types of transactions is less now than in 2007.
2. Since we were under contract without the seller agreeing to pay closing costs the buyer had a couple options: A. Find the closing costs somewhere or B. cancel the transaction. In this case, the buyer was using Own In Ogden which provided $3000 to a downpayment and $2000 to closing costs. (So the buyer originally wanted Own In Ogden assistance AND their closing costs paid by the seller.) They needed $2500 total to make it work for them so we agreed to pay an additional $500 toward their costs but compensated by increasing the purchase price $500 as well. In this case, the bottom line for my clients remained identical to the original offer. Fortunately, the buyer agreed to this arrangement and we are pressing forward.