My question involves real estate located in the State of: California
My son and his girl friend have been attempting to buy their first home for a little over a year. They have limited their search to properties that they can afford given their current income. As they work in San Francisco, this has limited their search to Concord where there is access to BART and to houses built in the 40's and 50's.
They recently made an offer on a home that was listed as a "lender approved short sale". The lender made a counter offer that they accepted. They deposited their earnest money with the escrow company. Escrow is supposed to close on 28 August 2008.
An inspection of the property was scheduled at the beginning of this week; however, my son received verbal instructions from the lender through his real estate broker not to perform the inspection. The reason given is that there was a dispute between departments at the lender about how the proceeds of the sale were to be distributed.
Last night, my son was informed by his real estate agent that the dispute hasn't been resolved, that the appraisal scheduled for next week shouldn't be performed, and that he should continue to looking for a home. The problem, according to the real estate agent, is that one of the departments would prefer that the property go into foreclosure. This would occur on 29 August 2008 and was the reason that the close of escrow was set for 28 August 2008.
My son and his girl friend can afford the house at the price that has been agreed upon.
- If my son accepted the counter offer from the lender, is there a valid contract under California Real Estate Law?
- There is $150 per day penalty for not completing all escrow requirements by 28 August 2008, is my son liable if he acted on verbal instructions from the lender not to perform the inspection and appraisal?
- Is my son denied any California Real Estate Law consumer protections as a result of actions by the lender?
Obviously, there is a fear that if the home goes into foreclosure that the current owner might trash the house. Would the lender be liable for the repairs as he caused this to occur?