Buying A Home
flyingsouth77
member
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Update to "Contract Advice Please"
We are getting a lawyer.
Our real estate agent says we HAVE to sell to our buyer and do so for $180K.
The other buyers want to sue us for everything we have for backing out of the contract.
They may take our home, according to the agent.
My advice to home buyers:
Hire your own lawyer to review the documents you are signing.
-Heather
Re: Update to "Contract Advice Please"
Yeah I also have a feeling your agent is corrupt. Definitely talk to your lawyer, but I imagine this happens all the time.
I would also go to your agent's manager for putting you in this terrible position.
If your lawyer says that you can walk away free and clear and your agent is full of crap, I would consider reporting him/her to your state licensing board.
No one should have to go through what you have gone through.
Sorry, but no one will buy your house at the asking price if it appraises for less than that. You will run into this with any buyer. Your agent is not bullying you - they are trying to inform you of this reality.
That you cannot afford the other house as a result is not the buyer's problem. It is your problem. You need to find a different house
We know we need to find a different house and we are fully aware that we can't get more than $180K. We are honestly fine with that if that's how it works out. However, the agent ordered the appraisal less than 2 weeks before close, and didn't tell us the discrepancy until yesterday. I feel this was done on purpose to bully us into closing anyway. We don't have the money. I want out of the contract, but the sellers are saying no, and my agent is saying that we have to go ahead with the sale and purchase. I want to talk to a lawyer first, because I don't believe her.
She keeps saying she has my best interests at heart. I disagree. She is not representing me to the best of her ability, and to her, my family is simply a dollar sign.
I feel so badly, because I really wanted to move. I've been packing and preparing for weeks. No one told me that an appraisal problem could do this. If I had known, the appraisal would have been done first thing.
I think what you need to do is to get a contract extension done with all parties.
If you can get 2 weeks extra to have a lawyer review the situation, this will help you out a lot. Also, it will give people time to simmer down emotionally. Everybody is hyped up over this new appraisal/financing news.
Also, simply say that if they force you into this, due to the short notice changes, you will be acting under duress. Making people these days threaten law suits but have no intention of ever following though. I'm not saying to not take them seriously, but they will bear a burden of lawyer and court costs too as well as the time involved.
In addition, I've heard/read that courts typically favor the buyer in situations too. It's my understanding that you're selling your home to a buyer and due to the appraisal coming in low, you do not have the cash available now to purchase (as a buyer yourself) another home from the sellers you've been working with. And, it's THESE sellers that want to sue you.
I would contact not only the agent's manager, but also another RE office entirely and speak with agents there. See what they say. Don't reveal to them who you are working with, just ask a basic question to find out if you are being treated fairly and honestly.
AND, definitely have a lawyer specific to RE look at everything STAT.
I was thinking of this more. I think it will fall under two categories, the contingency of the sale of your home and the contingency of obtaining financing. How specific were you guys in the financing contingency ?
If you don't sell your home, then you don't have to buy the new one
Even if you did sell your home, if you can't get the financing you need, then you should have an out too. Just like your buyer has an out since he can't get the financing he wants. Can you sue him because he doesn't want to bring money to the table ? Of course not. Think about it this way. What if it wasn't due to financing, what if in the inspections a 15k problem was discovered. Your buyer didn't want to buy if the problems weren't fixed and you didn't want to fix it. Your house doesn't sell and then you are out of buying the new one. At least I would think so.
I mean yeah the sellers can threaten to sue, but that would be foolish of them. That would mean there is a judgement against the home and they wouldn't be able to sell the home to anyone else with a free and marketable title. It truly is in their best interest to take the earnest money and run.
We are asking to push back closing until after we've talked with our lawyer. The earliest we are able to sit down with him is Thursday morning.
The sh!ttiest part of it is that my REA graduated high school with me and shares mutual friends. She says that she cares about me, but then keeps calling to ask us not to default because then we'll lose our good interest rate.
I have a feeling your agent has no idea what she is doing or that she is easily flustered when people talk about suing.
Has she even talked to her manager about this ? I mean this has to happen all the time.
Do you know any other agents that might be able to shed some light on the situation ?
So when she talks about defaulting, she is more concerned about the interest rate ? What happened to the " I''m going to sue you for everything you got and take your house away talk ?"
How long has your agent been doing this ?
FWIW, I used to work at a title company I never heard of someone suing over something like this. Yeah they might threaten, but it won't get them anywhere. Why would they pay all that money to a lawyer, risk losing and not be able to sell their home in the mean time. Again, that would be foolish of them.
Can you get with the RE attorney any sooner, even if all you do is talk on the phone ?
What ??? Why in the world would your agent tell your buyer's agent you said she was clueless?
I'm sorry but this whole situation is so bizarre.
I also have another question. Does your agent by chance know if you have a 401k or a retirement account that you can borrow from in order to get the extra money for the full 20% down ?
If so, I wonder if this is why there is so much pressure on you to sell sell sell.
Ummm seriously - you definitely need to go to another agency. This is almost laughable - the fact that the agent had no clue what PMI is why one might not want to be paying PMI is absolutely ridiculous. So amazing though - I'm convinced that all agents are shady crooks. All they care about is their commission, and once the deal is done, they don't care if you can pay the mortgage or not. It's a shame that this is happening to you because to have this kind of stress and hassle - the agent should not be adding to that.
Ok, you can take this with a grain of salt because I am in Missouri, but I just spoke to my REA about your situation ( because I didn't want to be in the same position) and she said that the sellers have no ground to stand on. When they took the risk to accept a contract contingent on the sale of your home, then they knew what they were getting into.
They took a risk when they did the repairs and they also took a risk when they took out a lease. That is not your problem. They could have always said " We won't do any repairs until your home is sold" but they chose not to. For all you know, the lease could all be one big lie just to get you to not default, because again, it would be foolish of them to take that risk. I mean really, how do you really know they took out that lease ? It sounds like everyone is trying to scare you. Once you talk to a lawyer ( who will probably laugh at the whole situation) I have a feeling everyone will back off. Right now, they are all hoping to scare you into doing something you don't want to do.
It also could be that they are threatening to sue because they don't believe you. They might be thinking you simply just want to walk away and are trying to " call your bluff." By talking to a lawyer, they will know you are serious.
Whatever you do, do not sell your home for 180k.
Oh and when you are talking to the lawyer, bring your listing agreement with you and see how you can get out of that one too. Your current REA has no business listing your home and is either inept or corrupt. Whatever you do, get out of it.
First of all, your agent should have informed you about an appraisal contingency for your current sale. I understand your frustration but you should have known this could happen going in. it isn't uncommon these days. Ours was very specific that we either lowered the selling price to match the appraisal or the buyer could walk away. Perhaps yours says the same thing and you could get out of the sale of your current house and therefore not have to buy the new one.
Not sure these sellers for the house you are buying have a leg to stand on. I'm sure there is a clause in your contract as to what happens if you back out or default which probably amounts to you forfeiting your earnest money. They can't take your home. it is stupid that someone suggested that.
The other lesson here for you and others is to not hire an REA you know personally.
It's never, ever a good idea to mix business and personal relationships (no matter how acquaintance-like they are).
It just makes any RE situation too ripe for problems with a personal r-ship in play.
YES!
This was the exact problem we had with the first realtor we wound up letting go. He was some Armenian guy who my H grew up with and goes to the same church and once my MIL found out that this guy was an agent, she insisted that we deal with him - you know because she has blinders when it comes to 'her people'. We gave it a shot though only because my H knew him too and felt ok about dealing with him. It wound up being the worst mistake ever and I saw almost immediately how shady he was. In the end, we cut him off because of certain things he pulled, and thank goodness we never signed any contracts or anything with him. I'll just leave it at that. Another family friend actually had used him as their realtor and the stuff they told me that he did during the transaction - like forging their signatures on documents and stuff - I?m surprised he still has a license. They wound up firing him and getting a new agent before they even closed their deal too.
Thanks for everyone's advice.
I, ( and hopefully others), can learn lessons from our mistakes.
Once they found that we were getting an attorney their tone changed. In fact, suddenly they are telling us how they are here to protect us and that no one is going to be able to sue.
Additionally, they called a meeting to "see if they can make it work" for us, with both REA's and the mortgage broker. My agent is going to pay for our portion of the buyer's closing costs, and they are attempting to get the sellers to lower the cost of their home by 9% to make up the loss we would take, and therefore make the home affordable. They think the sellers may be willing to do so in order to make a deal and keep this from becoming a worse situation. They are already renting an apartment and have the majority of their house in storage while their house is being built.
Funny how they are so willing to find a solution now.
We still aren't doing ANYTHING until we speak to a lawyer and have someone else review contracts.
Thank you for the update. I am relieved and yet angry for you at the same time. Angry that you even had to go through this situation and that your agent didn't do her job to negotiate a better deal for you once she heard your home didn't appraise. Think of all the grief, worry and anxiety this would have saved you if she did what you are paying her to do.
I am serious when I say have the lawyer look into your listing agreement. Your REA needs to be fired, immediately. You definitely should not enter into one of the biggest financial decisions of your lives with someone you don't trust and isn't your advocate. That would be foolish.
Please seriously consider filing a complaint with your state's licensing board. Your realtor has no business being a real estate agent. Think about her next clients who wouldn't have the means or know how to look into hiring a lawyer. Think about how they could have gotten into a situation they couldn't afford and how that could have effected the rest of their lives. I have a feeling your agent has pulled this nonsense before and will do it again in the future. Yes, it worked in your favor now, but what about those that didn't... ya know say " boo" to her. Think of the panic, confusion and stress she could have caused them in the future. Sure the state board might not take her license away, but if enough people have the courage to report her, then it might happen. Please promise you will at least think about it. I understand her was a former classmate and you have mutual friends, but again, she has no business being an advocate for people and her behavior tarnishes the entire profession.
We are absolutely considering reporting her. It seems like they are used to uneducated clients being scared and intimidated, and caving to the pressure. They are apparently used to dealing with clients not educated enough to know their options and financial responsibility. Clearly they are not used to being stood up to. I'm not a REA, but I think that in some cases I could do a better job.
Her broker is now involved, and I think she's gotten thumped pretty hard from him.
I am going to ask our lawyer what he thinks of her performance based in his law expertise. The guy we are seeing is a high profile name, and is known for being extremely tough. He also has lots of community contacts and influence in government. It could be very bad news for the brokerage...but honestly that's not my fault.
Again, you ladies are awesome. I didn't want to share these details with friends but very much needed someone to talk to. Big thanks!
Wow...if this is what the REA is used to - dealing with unknowledgable and uneducated buyers, then absolutely she should be reported for unethical practices because that's just wrong. People like her are part of the reason the market tanked and had those issues before - putting pressure on people to overextend themselves without considering the consequences. Granted as a buyer, you really need to educate yourself - know what you can and cannot afford etc etc - so you don't fall prey to this, but still, having an agent who preys on these types of people is not cool at all.
Keep us posted on how it all works out - I'm really curious about the outcome now, but it seems like it will work out in the end, especially now that you have a lawyer.
Is this what your agent told you ? If that is the case then you have absolutely no idea if that is true. She could be lying AGAIN. Face it, you can't trust her one bit. Please do what you can to fire her.
I was thinking about your situation, and if after you speak to your lawyer and he agrees, I would report her to your state's licensing board and possibly even to talk a local new reporter that specializes in consumer fraud. I believe this is exactly the kind of story they look for. I mean my goodness, the woman said you were going to lose everything including your home. That is outrageous. Think of the panic that could have caused someone. PP poster is right that consumers need to be educated about their options, and this is one of the ways to educate them. I know talking to a reporter might seem like much, but her behavior is so atrocious, that I believe she does this all the time and something needs to be done to stop it.
Why consider it? Just do it
Currently, the seller of the home we have a contract on is willing to lower their price by $10k in order to complete the deal. If we do not, we do not lose anything, however we lose our buyer as well as the good deal on a very nice home. We would also lose our 3.5% interest rate, and have to take another, 1 pt higher rate. This means that if we back out and fire out REA, we won't be able to find another home, in the same or similar neighborhood, that we can afford. At that point it would be better to just stay in the home we are living in.
There is no simple solution to this issue.
Are you positive the seller is willing to do that ?
Can you fire your REA and still go through with the deal ? Could you talk to your laywer about that ? Could he maybe represent you ? You said she got a thumping from her brokerage firm ? Could someone else represent you ?
I still think you could file a complaint even if you go through with the transaction.
I'm just saying this is one of the biggest purchases you will ever make in your lifetime. You must have an agent that you trust. Clearly, you can't trust yours as she has a history of lying, being lazy and not doing her job. Look into whatever alternatives you can to fire her and file a complaint. You were smart enough to know your rights and to talk to a lawyer. What if her next client is an immigrant, very young, or a first generation home owner. They would most likely put all of their trust in their agent and who knows, might not even know that there are such things as RE lawyers.
Whatever you decide, please look into filing a complaint with the state board.
I'm seconding this because it's true - OP, you knew something wasn't right and got a lawyer, but the next person might not and I'm sure this REA agent would take advantage. She probably has done this before and who knows to how many people.
In our state, I believe it is a law that you have a lawyer to represent you in this kind of transaction. Either that, or it's just assumed that everyone gets a lawyer because that was the first thing we were asked about when we made our offer on the house we bought - what is the contact information of your lawyer so we can send the contracts? And we had a lawyer in place just for this reason. It's a lot of money you are dealing with so it's a must to have a lawyer to protect you and well worth the money you pay for it.
Anyway, I do hope whatever happens and however this all turns out is in your favor.