Should we start repairs immediately on a short sale house we are buying before written confirmation of escrow extension date and authoriz to enter?
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Should we start repairs immediately on a short sale house we are buying before written confirmation of escrow extension date and authoriz to enter?
We are buyers in a short sale and were scheduled to close today but our lender has requested that mold and roof leaks all be fixed and remediated before loan approval. Sellers have moved out. We received an email from seller’s agent saying we will get an extension for close of escrow in around 2 weeks and no later. Should we start scheduling all repairs which we will have to pay out of pocket ourselves with receiving written confirmation of extension so that we don’t miss the date (we already released loan contingency)? Also, do we need any authorization for repairs and entry?
Asked on August 28, 2012 under Real Estate Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You can't repair the home until you own it--you have no right to enter, modify, etc. someone else's property, and until the sale closes, it's not your property. Even if given persmission by the seller to enter and make repairs, be very careful, because if the sale ends up not going through, you might not be able to recover the money you put into repairs--without an agreement by the seller to reimburse you these costs, a court could find that you essentially gifted them to the seller. What you describe is a very risky situation for you--you could end up spending/paying money which you'll never recover. Consult with a real estate attorney about this situation before doing anything.
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