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Personally I don't think the interest rate rouse is kosher. It might actually be fraud if someone proves you've gotten out of a contract doing that intentionally. A good agent on the seller's side won't let it slip by that the interest rate is unbelievably low. Plus as a seller, they'd potentially have to wait almost until COE to find out the buyer couldn't qualify. I'm sorry, but that's just not playing fair.
As far as getting a loan officer to "turn down" the loan so that you can get out of the house, that's basically the same thing. I know it's done, but it's very unethical. Am I right on this, mbmouse? Can't a loan officer lose their license if they're caught doing that?
The only thing that makes sense to me is to do the contract contingent on the transfer going through (in which case you can't leave the seller hanging out there for very long). Do you have an inspection period in your contract? If so, the seller's usually hanging out there until the inspection period is over anyway, so if your contingency is removed within the inspection period, the seller may be okay with that.
I also liked olecapt's suggestion (I never thought I'd find myself saying that) to get your husband's company to cover you on this.
And, finally, talk to your buyer's agent about this. That's what your agent is there for - to help you get the home you want, AND keep you out of trouble!
Actually Gretchen note that every REO deal I have seen in a long time says the bank can cancel whenever for whatever. So the thought of a cancellable on demand contract is thinkable. Now we have the question of whether it is immoral or unethical to hide the clause behind something else.
So is it evil to have an escape in your back pocket against a possible but unlikely bad circumstance?
Nahh...I don't think so. Simply business which is not always fair.
There is a very fine line between reasonable prudence and taking advantage of the other side...It is what we agents get paid the big bucks for.
Also check to see if you have to list your house first before the buyout. My husband's company bought our house but we had to list it for at least 3 months first to try to sell it.
I appreciate all the candid responses. We did decide to put a contingency in the contract regardng the transfer not going through, as the financing rate was questionable, at best.
However, I must say, I was never planning on coercing a loan officer to deny a loan to get out of a sale. I want to play by the rules, and that's why I posted the question, as I felt I would be drawing from a wealth of real estate knowledge beyond what my buyer's agent might say. In addition, buyer's agents don't make money if you don't buy a home, so an unrelated party may be slightly more objective. However, our buyer's agent was very receptive.
The other offers are contingent on home sales. I hope our offer will be accepted because we'll offer full-price, put down earnest money, and our contingencies will be inspection, financing and transfer approval, although we should have the transfer papers in writing by the time of the inspection. Luckily, we don't have to list our house first - they will just buy it.
I just don't like to do anything without having a guarantee in writing!
Again, I sincerely appreciate everyone taking the time to answer my question!
I appreciate all the candid responses. We did decide to put a contingency in the contract regardng the transfer not going through, as the financing rate was questionable, at best.
However, I must say, I was never planning on coercing a loan officer to deny a loan to get out of a sale. I want to play by the rules, and that's why I posted the question, as I felt I would be drawing from a wealth of real estate knowledge beyond what my buyer's agent might say. In addition, buyer's agents don't make money if you don't buy a home, so an unrelated party may be slightly more objective. However, our buyer's agent was very receptive.
The other offers are contingent on home sales. I hope our offer will be accepted because we'll offer full-price, put down earnest money, and our contingencies will be inspection, financing and transfer approval, although we should have the transfer papers in writing by the time of the inspection. Luckily, we don't have to list our house first - they will just buy it.
I just don't like to do anything without having a guarantee in writing!
Again, I sincerely appreciate everyone taking the time to answer my question!
Glad to see you and your agent took the high road. Now everybody can sleep at night. Sounds like your agent has got you covered in case the transfer doesn't go through. Do you have long before you'll know for sure? I would think your contingency would be much more attractive than an offer contingent on the sale of a home. Your situation guarantees the seller a much quicker close.
Great outcome. You should carry the day with no problem. It is only those pesky no contingency buyers you fear in this situation. Luckily they are mostly an endangered species in the present climate.
And this way Gretchen and I do not have to arm wrestle over the morality.
You most certainly should put a contigency in your contract if you are not 100% possitve. In this economy I think you are crazy not too. You are then obligated to deligently search for a reasonable mortgage. If your realtor or anyone else suggests that you waive this not only should you disregard their advice but, find a new realtor. The mortgage contigency is in the contract for the protection of the buyer. However, you need to set this up do so! The seller can benefit from the contigncey only if the buyer can not find a mortgage in the time specified on your purchase contract... This is a buyers market. I know that you really like this house but, I had to take my 3 kids, dog and hamster to a hotel..while our house closed and it wasn't so bad. You have clean sheets and towels...
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) to get your husband's company to cover you on this.
transfer
