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Originally Posted by X5 Meister
The due diligence period IS the escrow period. All sales are 'as is'. You can't just put 'clean title or deal is off' since he may have no idea... a title search is a complicated thing... that's why title insurance exists, because it is so complicated. Besides, if he could put 'clean title or deal is off' then why stop there? Just put 'no problems of any kind or deal is off.' Home inspection will be set up by bank or someone else who is independent.
You are missing the point. Yes title or structural are separate from financing, but those are just two potential problems that could result in a bank NOT granting the loan. If he signed an agreement putting down money and saying that he is buying without a mortgage contingency, then he is screwed unless he can get another source of financing fast or finance it himself. If he does neither, he broke the contract and loses his downpayment. That's how it works.
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Meister, not trying argue, but you are the one not getting it. A property can be sold A) subject to a due dilligence period or B) "As-Is".
Buying a property with a due dilligence period allows a buyer to back out of the sale for any reason within a 10 day period from the binding agreement date. This is called the Due Dilligence period. The buyer can perform home inspections and so on in this period.
Purchasing "as-is" is exactly that. You are signing the contract and have to take the house with all of it's faults. You do not have the option of a due dilligence period to back out. They are two very different ways to purchase a house.
Also, I just provided word for word the fact that if the seller can't provide clean title on or before the closing date, the buyer can back out.
Home inspections are not set up by the bank. They are not even required in my state (not positive about California). I purchased a home 3 years ago and set up my own inspection with the inspector of my choice on the date I chose. Not sure what you are talking about.
I fully understand that a bank may not loan money because of title issues, but here is the thing. There is a clause in the contract that states if the seller can't provide clean title, the deal is off, period, end of story. If the seller can't provide clean title, then the financing is a moot point and the buyer gets their money back. Get it, the financing would be denied because the seller broke the contract.
Also, If B-Line buys the house subject to due dilligence period, then he can set up an inspection when he wants (within the 10 day d.d period) and have the home looked at. If there are major issues, then he can back out and once again keep his earnest money.