What Do I Do About The Bank Not Answering?

LoveInTheHouseOctober 25, 2011

My buyer missed the closing date because his bank was not ready. It's been one thing after another. Not to mention the fact that this has caused a hardship because we are now unemployed (because we are moving to a new state and had to stop work!) and all the inconvenience (canceling trucks, horse hauler, etc.), but it has caused me to miss the closing date for the house I am trying to buy and the seller is pressuring me and threatening to kick me to the curb.

First this bank made my buyer get a new job because they thought his commute was too far from my house to the old job. Miraculously, he did that. That took time. Then they wanted a document from the old job saying they would rehire my buyer if necessary. I know, it's unheard of. But true. He got it. Then they wanted another bank statement showing the money trail. Throughout all this they kept saying they were "shooting for" a commitment on Wednesday or Friday or next week, whatever was ahead of us. After the closing date came and went, they asked for more documents showing a tax payment was made. It was. The loan officer told me she requested the underwriters let the loan go forward with the electronic proof. She said we'd find out in a day or two if they would, otherwise it could take 30 days to get something back from the IRS verifying this was taken care of. I let a couple of days go by and called the bank to find out the answer. The loan officer said she would get the answer "today." That was yesterday. I waited till the end of the day to hear from them but nothing. I called twice and left messages. I waited all day today to hear from them but nothing. In the meantime, I have the people up north who's house I'm trying to buy, the agents, closing agent, etc. all asking me for a new closing date. And I have NO answer. Maybe we'll close next week. Maybe it'll take the 30 days. I don't know! I have to tell these people something! I have to know what I am doing! What does this bank think, I'm going to be on call when, IF, they finally decide they're going to close and move a whole family, business, farm, at a moment's notice? We're going to have to go back to work again--restart our advertising, call up the contractors we work for and let them know we're still here and can we have some work? We can't just wait indefinitely! We have bills to pay. I just can't believe they do this to people. Can you guys give me some advice on how to handle it? I don't want to respond emotionally. If I assume one of the worst case scenarios that it's not going to happen for 30 days or more, I will lose the house I'm trying to buy and then when my buyer's bank finally can close, I won't be able to get out on time because I'll have nowhere to go. What do I do?

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brickeyee

Since you have no relationship with the bank, the buyer does, it is not surprising they are not answering your calls.

    Bookmark   October 26, 2011 at 10:07AM
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LoveInTheHouse

Who said that? I do have a relationship with the bank Brickeyee. I spoke to them at length a number of times before we even started this process and throughout it, informing them of the kind of property this is, confirming my buyer's ability to qualify for the mortgage, etc. We have communicated regularly until now. It is in my contract that the bank is directed to communicate with me and keep me apprised, just as they would with a real estate agent who's brokering the deal. And every time I speak to them, I speak to my buyer first as a good faith measure because I respect his privacy. My buyer is just as upset as I am.

I just spoke to my attorney who is going to try to get through to them. She said this bank is horrible about returning calls and closing on time. I guess I'm just going to have to assume it's not going to happen and then I won't be ready when or IF they ever are. There's nothing else I can do.

    Bookmark   October 26, 2011 at 10:56AM
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ncrealestateguy

Is the buyer hammering the lender as much as you? I bet not. The lender is not a party to the contract, so they do not have to tell you anything, even though they probably should. Once again, what is the buyer telling you?

    Bookmark   October 26, 2011 at 11:48AM
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pamghatten

As stated above by 2 others ... The bank shouldn't be talking to you or your attorney, even if your buyer gave permission. The loan is to your buyer, not you. Your buyer should be harassing them.

    Bookmark   October 26, 2011 at 12:51PM
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brickeyee

"Who said that? I do have a relationship with the bank Brickeyee."

You are arranging financing for your buyer as their agent?

While you may have used the same bank for 50 years, as the seller you do not have a relationship with the bank for that transaction.

The borrower has the relationship.

I would be filing complaints all over the place if a bank had a conversation with a seller I was dealing with.

Even if they want information they had better ask me to obtain it for them.

    Bookmark   October 26, 2011 at 2:09PM
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LoveInTheHouse

NC, no, I doubt the buyer has been as active as I've been. The drawback of the FSBO, I'm doing both his agent's job and my agent's job. I don't mind. I just want an answer! The buyer simply told me what the bank told me last week--they should have an answer in a day or two whether they will go forward with the electronic verification or whether we will have to wait about 30 days for the IRS to report back that it's taken care of. I waited a day or two, then the bank fell off the face of the earth. I just want to know one way or another! I don't necessarily want to start pressuring my buyer like the seller of the house I'm trying to buy is doing to me because he got me so mad I felt like telling him to take his house and shove it. (He is not under the gun like I am--his house is an unoccupied investment property that's been vacant for three years--he just wants to pressure me.) Do you guys think I ought to put a little more pressure on my buyer even though it appears to be out of his control?

My lawyer just informed me that she tried to reach the bank today but the person who she normally deals with regarding this deal is not there today and will call her back tomorrow.

I have strong interest from a cash buyer waiting in the wings but it's a lot less money. I want to be smart.

    Bookmark   October 26, 2011 at 3:50PM
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ncrealestateguy

I would be calling the buyer every day for an update, and his plan on making the deal happen. Even if he is in the middle of the Carribean.

    Bookmark   October 26, 2011 at 5:12PM
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brickeyee

"I want to be smart. "

The have your attorney investigate if the contract is effectively dead and proceed with your cash buyer.

Do not try to keep any earnest money, just kill the contract cleanly and quickly.

You are pushing on folks who may well respond by slowing things down if they become irritated.

    Bookmark   October 26, 2011 at 5:35PM
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greendesigns_gw

Cash in the hand is worth MUCH more than iffy financing. Give your buyer a set in stone deadline of Friday, and if he can't make it happen, enter into a contract with the cash buyer. If you want to move, you're going to have to jump on what you can get right now, rather than holding out for a little more that is financed. You do not have the luxury of waiting the 30 days. You need to either drop the whole selling thing for now and start your business back up ASAP and build up your cash reserves a bit more to be able to withstand getting yanked around like this next spring, or you need to get what you can as fast as you can and haul butt out of there.

    Bookmark   October 26, 2011 at 8:08PM
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LoveInTheHouse

NC, I'm dying to do that but I'm a little hesitant because I'm afraid I'll get the buyer mad like the seller of the house I'm trying to buy got me mad and then I started thinking he should shove his house, I'll look for another one. Maybe the lawyer will have some news tomorrow. Maybe I should just "act as-if" and assume this deal is not going to happen and start marketing again, unpack, restage, restart work, etc. Then if another buyer comes through, give the buyer a deadline if he hasn't performed by then. I have a bad feeling though. It occurred to me that the bank is avoiding us because they are going to reject the buyer and they want to tell him first.

The cash buyer is no sure thing. It's just someone who showed strong interest. She hasn't even seen the place yet but has called a number of times to keep checking and it does sound perfect for her. I've gotten so that I have a pretty good feel for which ones are live ones. But that doesn't mean anything until I actually get an offer.

Green, you're right. I have to do one thing or the other. And I have to decide now.

Well, thanks guys. I appreciate it. I'll let you know what happens.

    Bookmark   October 26, 2011 at 9:48PM
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liriodendron

LITH,

Ask the possible cash buyer out to see the place, now; if she won't bother to come at this point she's just hoping to scoop up something cheap, cheap, cheap when/if you get desperate - perhaps more desperate than you would ever get. Test her interest with the invitation. If your place meets her needs, invite an offer from her.

Your buyer is in default (and I have no doubt he knows that) -in addition to being in the Caribbean, so if the cash buyer makes you an offer you can live with, then take it. Tough luck for your current buyer. He coulda, woulda, and definitely, shoulda!

Everybody is right, IMO, about who should be screaming (metaphorically, maybe even literally) at the bank and it is NOT you! Your pressure is more likely to screw up the process because you have no relationship to the bank. The way that they see it, they're not going to lose a dime if they p*ss you off. The buyer, OTOH, is their customer - not that that matters all that much these days.

But truly, it is your buyer who has pledged to buy the place and getting the funds together to do so is entirely his problem, not yours. In your eagerness to get the deal done, you have have overstepped the correct boundaries of the separate, and distinct, roles and made it too easy for him. I'm not saying he's not committed, but I am saying he isn't carrying HIS load. He needs to man up and act like a competent grown-up who can get a fairly straight forward home loan done. In a perverse way, your efforts have enabled him to continue to fool around on his way to this purchase - and now you're feeling the fall out.

Tell the cash buyer this: it appears that your current buyer is in default and may not be able to close (she needs no other details, and hopefully she doesn't know them) so you are preparing to put the property back on the market. But given that she has shown so much interest you are, courteously, offering her a "preview" to see it before anyone else does. This is putting some tactful fairydust on the situation, but she doesn't need to know that. Just set it up as a chance for her to see it before anyone else, and not a last ditch effort on your part.

Meanwhile, the old clanker down in my basement is still puffing and screeching away and mojo-ing like mad on your behalf.

(And, if there is a next time, DO NOT DEAL WITH YOUR BUYERS' BANK - that's their job, and if they aren't on top of it, at every single turn, consider it a clear sign they aren't really committed to the deal. Build hard pass/fail tests at various stages of the contract so you can bail at the first sign of dilly-dallying - even on the part of their bank. It will save you time and angst.)

HTH,
L.

    Bookmark   October 27, 2011 at 1:45AM
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ncrealestateguy

One more suggestion...

Ask the NJ seller if you can extend the closing date until on or before 35 more days. If he says yes, then all is well. If he says no, then let him do what ever it is he is going to do.
I would not kill this deal until the lender says it is dead. Buyers are too hard to come by. Even if your NJ buyer says no to the extension and kills the deal, the lender may call you tomorrow and say they are ready to close. You can then call the NJ seller and enter into another contract, if the property is still Active.
I suppose the mitigating factor for my scenario would be if you and your spouse are able to hang on for 35 more days.
Good luck.

    Bookmark   October 27, 2011 at 7:46AM
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LoveInTheHouse

What would I do without you guys?

Lirio, the only reason I haven't rushed to show the place to the cash buyer is because she is coming from another state and I don't want to waste her time and make her come all the way down here if this deal does go through. She told me what she could pay, since she's buying cash. It's about twenty thousand dollars less than the agreement I have with Slow Bob. If I let this lady come, and then all of a sudden Slow Bob's mortgage comes through while the lady and her husband are discussing the place and preparing to make the offer, if they like it, I'd feel terrible. It's a ten hour trip.

You're right, I should have built into the contract hard pass and fail tests. And you're right. He definitely wants the place but he's not acting like a competent grown-up. He is just real lax and easy-going, quite unlike me. And he even changed jobs and doesn't seem worried about it! Can you imagine going on a cruise while all this is going on?!

NC, we can hang on for the whole winter if we have to. I'll just have to get business going again and unpack and all that. It stinks but it's not the end of the world if I put it into perspective. I'll let you guys know what happens. Thanks so much.

    Bookmark   October 27, 2011 at 12:36PM
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brickeyee

"I should have built into the contract hard pass and fail tests."

Just remember you have to get agreement on the contract.

    Bookmark   October 27, 2011 at 1:15PM
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