Will not signing an addendum jeopardize the purchase of my house?
August 2, 2011 6:26 PM   Subscribe

Is it normal for an escrow company to request addition of an addendum AFTER all the papers have been signed but before officially closing?

It is the 11th hour. We're in escrow to buy a house and it closes in two days. Last Friday, we signed all the papers at escrow for the loan. There will still be disclosures and other forms to sign at closing, but the lion's share of the paperwork is done.

A bit of relevant background:
1) Part of the original deal included $8,000 for us to get the roof replaced. The FHA wouldn't approve the loan unless the roof was replaced BEFORE closing, so the seller had the roof replaced. We signed an addendum at that time to allow them to use the credit to pay for the roof, and the balance (if there was any left) would be credited to us. If it was more than the $8,000, then they'd eat it. The quote on the roof was $7,000. The roof was replaced about 2 or 3 weeks ago.

2) I don't trust my or the seller's agents. It's a long story--and the subject of a previous AskMefi question.

My agent sent me an addendum for us to sign from the escrow company. The addendum approves us paying another $300. The story from escrow and my agent is that the invoice for the roof ended up being $7,300. I asked for an itemized invoice. I received back a paper that had only two items:
1) Original bid price.....$7,000
2) Replaced damaged wood sheeting 106' at $3 per foot....$300

So there's the $300, but what does that mean? There's no breakdown of costs. I wasn't aware there was damage to the roof; I'd not been told this before. The roofer, by the way, did a stand-up job and was good. I was able to talk to him before he did the roof. However, as I said, I'd heard nothing from him or the seller about damage on the roof.

So my questions are these:
1) Closing is Thursday. What if I refuse to sign the addendum? What happens? Does this jeopardize the whole transaction?
2) Is this type of invoice (just the two items) standard and/or normal for roof repairs or replacement?
3) I'm so worn down, I almost want to just pay the extra $300 without making a big deal out of it. But is this what everyone expects at this point (escrow is tiring and a major pain)? Did they just throw in this extra $300 in the hopes that I just pay it without asking any questions?
4) I know that invoices can be higher than estimates, but is this normal to do this AFTER all the loan docs are signed? The seller indeed is irresponsible (trust me), so I could believe he'd forget until the last minute and throw the paper into the pile. But am we on the hook until 5:00 PM on the day of closing, or just after we signed all the loan docs?
5) I know many of you are probably not California real estate attorneys (I've already talked to one about the previous issue), but is this worth contacting an attorney over if it's less than $300?
6) It's so frustrating; should I just pay the $300 and be done with it? That's a dishwasher, though! 300 bucks! That's paint and paintbrushes, rollers, and pizza. I hate to just give up $300 for no good reason. Of course, sanity MAY be a good reason...

Keep in mind, I'm not usually a confrontational or litigious person. I'm just sick of all this crap, and have come to develop a major lack of trust in anybody that could make any money off the sale.

Thanks for any insight you have!
posted by rybreadmed to Home & Garden (5 answers total)
My advice: Eat it. Though it's not clear from your question that you're actually out all that much, eh? There was $8,000 credited (I assume by reducing $300,000 to $292,000 or similar, eh?) and they were only going to use $7,000 of it, and ended up using $7,300.

The original roofing bid was probably an even number, based on "needs no sheathing or other repair". Unless the house is tiny, $7,000 is a pretty low roofing quote, around here I'd expect five figures for even a simple roof.

TL, DR: You only have to do this once in a great while, and you're being ripped off way more in various stupid document fees and commissions than you are on this particular piece. If you really want to stick to your guns and the house price was anywhere over $250K I would expect your agent would pay the overage to salvage the entire transaction, but you're not going to make a friend in the process.

(Note: Mrs. maxwelton would walk, her temperament is like yours, it sounds like. Me, I just want the whole friggin' thing to be done with, and I'm not going to make waves over a tiny cost in the big scheme of things.)
posted by maxwelton at 6:52 PM on August 2, 2011 [2 favorites]

Thanks, Mr. Maxwelton. You and my wife versus me = caving in and paying the $300. All well. That's life. I suppose I was about to make this way more of a big deal than I needed to.
posted by rybreadmed at 7:25 PM on August 2, 2011

It looks to me as though the roofer made a bid based upon a simple replacement of the roof with the possibility that additional damage that was unseen might make it cost more. He appears to have found additional damage.

As to the timing, I suggest you just let it go. The roofer is probably owed the money and getting into a contest over other people's sloppiness will just take away from the joy of getting that house that you want. You do want it don't you?
posted by Old Geezer at 7:30 PM on August 2, 2011

Incidentally, the overage charge looks pretty reasonable.

106 square feet is 4 sheets of sheathing. For you to walk into home depot, you'd pay $36 apiece for that, or $150 just for materials. He'll pay a bit less, but still sounds like a good deal to get those materials, demo of the old stuff and install for $300. He could have just as easily not given a crap and left the bad stuff up there.

So doesn't sound like anyone is jerking you around.
posted by maxwelton at 8:32 PM on August 2, 2011

Pay the $300, that's cheap for replacing the sheathing.
posted by tomswift at 3:16 AM on August 3, 2011

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