Property Manager MA: What to do if a home is damaged during Escrow
It can be devastating when a home is destroyed or damaged by fire, some other issue or a natural disaster. This can add a lot of stress to a person’s life and add more to the bill. However it is worse when it occurs during the escrow period. It can add a lot of stress for both the buyer and seller.
It’s a good thing if your contract protects you in case there is any damage. A number of contracts do have a damage clause there. In the event that the damage affects less than 5 percent of the value of the home, then the transaction goes ahead. However the seller will need to take action and take care of it. It can be a pain if you don’t have this provision as anything can happen. So make sure that you add this clause before you sign up for anything. Just ensure that it includes devices which could cause this damage. If the damage is over five percent, then the buyer has the option to cancel and simply walk out without losing any deposit money.
The bank will have to get involved
It is most likely that the buyer has taken out a mortgage which approves credit for up to three percent without incident. If there is more damage, then the bank will have to be informed and go for a new appraisal. This means that they could also cancel the loan if they don’t think it is feasible. This is when they re-do the loan, adjust the price and underwrite it again. This also means another round of appraisals and to extend the contract frame.
Property Manager MA: Inspector
You have to have the property inspected before you close so that there are no legal issues. The buyer needs to inspect to make sure that there are no pre-existing problems. In the event that there are problems, the seller can repair everything or simply renegotiate it.
The buyer has the most advantage as he can walk through the home before the sale closes. This gives him an opportunity to delay the closing if there are any issues. The seller has to cooperate because he wants the sale to go through. If both sides agree then the sale usually goes through without a hitch.
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