The title issues would most likely be picked up by the closing attorney and if they aren't, title insurance should cover any undiscovered issues.

The structural issues would be observed during a property inspection. As long as B-Line doesn't purchase "as-is" he would most likely be able to back out of the purchase if there were any structural issues with the property.

If the other "buyer" is willing to purchase "as is", with no financing or appraisal contingencies, then walk away and let them take that risk or call the sellers bluff. Otherwise, if you are confident about your credit score, income, debt ratios and market value of the home, you are somewhat limiting your risk. If this is a must have house, then you may be willing to take the chance that you will lose your ernest money. Once again, it depends on how confident you are on those items and how bad you want the house. Is it the most safe way to buy a house, absolutely not. Is it worth the risk, that is a personal decision you have to make.

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Profeshenal spellar

Yes title insurance and property inspection and all that, but that is down the road and takes place during escrow and then covered at closing. The point is that if he puts a downpayment down now with no loan contingency and those things end up causing the financing to fall through during escrow...it happens plenty of times ... then the deal is off and he's out his downpayment unless he wants to finance it himself. If a seller insisted on no loan contingency then the only way I'd ever agree to the deal is to have the seller agree to private financing (having the seller give me the loan) should the bank not come through.

Not necessarily. Say he signs a contract tonight with a due dilligence period. The financing will take weeks to be finalized, so he can set up an inspection in the next few days. If there are any major issues, he can back out before the financing is ever an issue. As long as the sale is not "as is".

I am not 100% positive on the this but, I am pretty sure that B-Line can put a simple stip in the contract stating that the title must be clean or it is a deal breaker. If the owner wont do that, then don't sign.

Actually, I am looking at a typical F-20 purchase and sales agreement contract for an appraisal I am doing right now and there is paragraph in there regarding the title that states; if the seller fails or is unable to satisfy valid title objections at or before closing, or any extension thereof, which would prevent the seller from providing good and marketable title to the property, then buyer, amoung other remedies, may terminate the agreement upon written notice to the seller.

So basically, title or structural issues are considered seperate from financing, so he should be able to back out due to those issues without sacraficing his earnest money.

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Profeshenal spellar

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. (Escrow not closing is plenty frequent) If he does neither, he broke the contract and loses his downpayment. That's how it works.

Hey Guys..

So the deals are in and the owner is making a decision on which one to take. Evidently both me and the other buyer came in very close.

It's not an "As Is" deal. I've got a 10 day inspection period.. If they tried to force the "as is" I would have walked, no question.

There was some other strange detail that the builder only wanted to be liable for up to $1000 of termite repair.. So I'm going to have my termite guys go through with fine tooth combs.. But all houses in Hollywood have some termites.

I've been assured by just about everyone that 30 days is enough time to secure a mortgage.. But I'll keep pumping away and make sure that it happens.

I've also learned that if it doesn't fulfill in 30 days that the current owner has to reasonably allow me to secure the financing if they take the down payment. If they don't take the down payment then they can walk away from the deal..

But if they take my money, any judge or arbitrator will insist they give me a few more days to close up the deal. We may just have to release more funds..

So lets cross our fingers, I find out tomorrow...

Thanks everyone.. You've been really helpful.

And I did do a lot of research and dotted my I's and crossed my T's before jumping into this risk.. I think the upside FAR outweighs any downside..

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"When two people agree on everything, one of them is not necessary" - Arliss

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.

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Profeshenal spellar

Good luck! I hope they take your offer. It sounds like you know what you are doing and really want this particular house.

It is much harder for a seller to keep earnest money than most people realize.

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Profeshenal spellar

Don't do it.. Interest rates going to go higher due to the failed treasury auctions. IF the 30 year treasury auction is bad tomorrow, I can guarantee you there will be jump in rates and the other the other "potential" buyer who released the contingency will be SOL. Keep your loan and inspection contingencies in place. If the other "buyer" pulled their contingency, its pretty surprising why they would would have done it while still letting the seller take other offers.

Treasury rates are up big time, read this story

http://www.businessweek.com/investor...ge_top+stories

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