Will I lose my deposit if the house I purchased burns down before I take possession? – WORRYING
DEAR WORRYING: Typically, a few months lapse between when a buyer signs the Agreement of Purchase and Sale and when the sale actually closes. If the home suffers damage in that time, it’s up to the seller to fix. If that damage is catastrophic (such as if the house burns down), the buyer may have the option of taking the money that comes from the seller’s insurance policy and proceeding to close, or cancelling the agreement and getting their deposit back.
Here’s the catch — the buyer has to decide what to do by the time the sale closes, even though a fire investigation takes time and the seller’s insurance company may not have decided whether they are going to pay out money on the policy by then. Unless they were planning to knock the house down anyway, a buyer may take this as an opportunity to walk away and have their deposit refunded. It’s a tough decision, but keep in mind, the likeliness of this happening is very slim.
We are trying to buy a home in the $350,000 range and have lost out on a few. We heard our friends got a second chance to bid when they were in multiple offers last week. Why didn’t that happen for us? – FRUSTRATED
DEAR FRUSTRATED: In a multiple offer situation, there might be one offer that’s a clear winner, or a few that are pretty close contenders. The process for reviewing offers varies; a seller may choose to either “work with” a single offer out of the gate, or have their Realtor send offers back in hopes that a clear winner will emerge if buyers “bump up” their offers in a second round of “bidding”.
For buyers, the chance to make a second offer is never guaranteed. If the seller receives an offer in which the closing date, conditions (or lack thereof) and price are in line with their expectations, they may accept it as-is, or continue negotiations with a single buyer who stood out from the rest in their eyes.