Sellers Remorse, or Irrational Behavior? (tenants, contingent, appraisal, agent)

[Nor Cal Wahine]

Greetings all ...

Long-time lurker here who has come to really rely upon these fantastic forums for a wealth of info. Now, I have an interesting situation to pose upon you regulars ...

My husband and I just bought a home out of state - where my husband is orginally from, and where his company is transferring him back to. We found the house we really wanted in an area we're both familiar with and after our agent (who is wonderful - we adore her) went out and took a look at it herself, we were fully prepared to put down the offer sight-unseen. Then we found out that the listed acreage was incorrect - that the property was actually smaller than they had it listed as. Our agent, sharp as a tack, caught it while calcing the plat map and reported it to the seller's agent. We first decided we did not want the house based on this new info - then after considering it carefully, we contacted our agent the very next day and told her that if they were willing to lower their asking price that we would still go through with the offer. The sellers weren't happy, but they did lower the price accordingly. Their agent kept telling our agent how motivated they were to sell, sell, sell.

We had a trip already planned/booked to the area, but not for about 8 days after we were ready to put down the offer. We requested an option period to allow us a walkthrough together but the seller, extremely eager to sell, offered us no more than 7 days - so my husband booked a last-minute ridiculously overpriced fare and flew out to see the house, both to reassure ourselves that it was as good as we felt it was, and to assure the buyer that we were very motivated to buy, as he seemed really panicky about accepting an offer from us without us having been out to the house. That was understandable to us, and we chalked up the extra money spent as a good value in assuring ourselves that home.

Hubby loved the house, knew I would too, and that was good enough for me. We put in the offer contingent on nothing more than it passing a home & septic inspection. No home to sell first ... all our ducks were in a row. The sellers immediately accepted it, and we paid for various inspections, appraisal, etc. The septic inspection came back with a poor report however, and repairs needed to be made. We had one day left of our option period when this was discovered so our agent was able to add three days to the option period in order to give the buyers time to determine what extent of repairs they would pay for and have us agree to it. During this three-day period we would be coming back out again to see the house together as previously planned, and the sellers became so fearful that I for some reason was not going to like the house that they agreed to pay for all repairs, but ONLY if we signed the addendum and officially ended the option period the day before we came out (and i could see it myself). We felt they were being pushy & unreasonable but tried again to put ourselves in their shoes and understand their desperation to get the home sold asap, and not have a buyer flake out at the last minute ... so we agreed to sign the addendum the night before we came out.

Went out and saw the house - and of course, we loved it. The needed septic repairs were underway, there were no other problems, and we went home very happy. The sellers asked for a short close so they could then wrap up the closing on the new home they wanted. They wanted the sale handled as quickly as possible so we complied with this request as well, with the agreement that they would lease-back the home from the date of close for a period of 78 days. It worked out mutually, as we had all our paperwork and finances in order and were ready to buy and because we wanted our child to finish the school year before the move just as they did.

With me so far? I'm long-winded - my apologies!

Fast-forward to last Friday, when the close was handled - and went off without a hitch. Our agent Fed-exed us back their lease-back check for the full rental period with the contracted stipulation that they have to be out by a certain date, and that if they choose to leave early, they forfeit their rental funds. That period began the day after closing. We spent the weekend in a state of excitement and relief!

So last night we get an email from our agent with some disturbing news. After 29 years in the biz she said this is the FIRST time she's ever seen this happen ... The sellers have either a horrible case of remorse, cold feet, or are just plain kooky ... but after all this, the wife has apparently decided that she doesn't want to leave that city and so they DON'T want to move. They withdrew their offer on the house they were going to buy and asked us if we would consider selling them their house back! We were absolutely floored by this. We are already so invested - financially & emotionally - in this house. And they want us to just sell it back to them?! We told our agent that while 'everything has a price', we doubted that the sellers were willing to do what it would take to get us to go through the process of now selling it back to them. We would naturally expect them to pay for every single fee associated with the sale as well as give us enough profit on top of that to make it all worth it and help ensure we could find a comparable property. On top of all of that, we LOVE the house we just bought, and are eagerly planning our move into it! This is a 1500 mile relocation - not just across town!

So ... now that the sellers (who are now our tenants) are in a house that they don't want to leave - where does this leave us? Will they want to leave early if they find another home and if so, expect us to refund some of their money? Will they want to stay later than we have prepared for them to do? We can offer them another 10 days of rental but not a day more than that. Will they have a chip on their shoulder and maybe not treat our house as well as they did when it was theirs? Are they of sound character, or would they go as far as to engage in nefarious activity in order to stall out or ruin the transfer of this house? AAACCCCKKKKK!

Any ideas or suggestions on how we should be looking at this or what we should potentially watch out for?

Thank you - to any of you who have read this out.

Aloha,

NCW

[jenkirk]

Read the lease contract. It should have a stipulation where they have to pay you so much a day for every day they are there after the lease period is over.

You own the house, so you can always start legal proceedings to have them evicted once the lease contract is up. It will be a pain, but it is legally your home. The main issue will be them not destroying the property in any way. Get a real estate attorney. Your realtor should be able to suggest a good one.

[bentlebee]

Do you have pictures as of the date you owned it from in side and the outside? So if needed you can proof of any damage. I know you have the inspection report and you should hold carefully to it. I'm affraid this can turm out ugly and wish you all the best.

[Nor Cal Wahine]

Originally Posted by bentlebee

Do you have pictures as of the date you owned it from in side and the outside? So if needed you can proof of any damage. I know you have the inspection report and you should hold carefully to it. I'm affraid this can turm out ugly and wish you all the best.

Thank you - both of you - for your responses. We have BETTER than pictures ... we have a 30 minute video we shot of the entire home - inside & out, of every corner of the property. We carefully documented every room and any deviation from the state the home was in between the date of close and the date of their leaving the property can be easily documented.

I suppose what has me troubled is more of a guilt issue than anything else. I genuinely feel sorry for these sellers despite the fact that they have exasperated us to no end throughout this transaction. On top of that I'm just worried about having a family who is potentially unhappy with our unwillingness to give them back their house living in it for the next 2-1/2 months. I suppose we'll just need to have faith that they are good people.

[Sweetbeet]

Well, at least they seem to change their minds a lot. Maybe they'll change it back and decide they want to leave. They sound pretty irrational to me.

[Silverfall]

If they have lived in the house for a long time, I am guessing that they just got overwhelmed by the process. Sometimes people get excited about a move and then turn around and realize all of the sorting and going through items, what to keep...what to sell, and packing that is takes to actually move. I am guessing they were excited at first and then became completely overwhelmed.

Hopefully they have a really good buyer agent who can help them start to move on. Some people need a lot of hand holding (and sometimes a kick in the butt) to do what they need to do. Sounds like those kinda folks to me.

[haberstroh]

Don't feel bad, this is your house and the law is on your side. I would not sell them the house back so easily, maybe for a huge profit for all the pain...We were just discussing lease back options on another trend here and this is a super example how this can back fire. But then again who knows if you did not have the lease back period maybe they would have never shown up at closing. Don't be emotional about it, the whole process of relocation is stressful enough (been there, done that ;-)
I wish you good luck and a good lawyer!

[shroom]

Interesting, but distressing, dilemma. Back in The Dark Ages when I was a Broker in CA, I had a few sellers get cold (AKA: frightened) feet during the escrow period when they fully realized they were closing one Life Chapter and opening another, but never after closing.

First and foremost, don't let your emotions for the orig sellers get in the way of clear thinking, and don't allow anyone to lay a guilt trip on you. Even though this deals with a home, you are now the owners of that property and what the orig sellers are asking is nothing more than a proposed business transaction that should be dealt with as such.

Next, I think the threshold question is: Do you love the house & property enough to fight for it? If not, you're entitled to be made whole by the orig sellers buying the property from you at a price that covers ALL of your costs arising from BOTH escrows, including the higher of your purchase price or the current FMV, and you should also require a long enough escrow period that will allow sufficient time for you to locate and close on a suitable replacement property.

If you do love it enough to fight for it, your 1st step should be to talk with an experienced RE atty* to explore your rights, remedies, and costs in the event the orig sellers breach the post-closing lease agreement and/or damage the house/property. If you opt to keep the property, cooperation with the orig sellers if they need to reasonably extend the lease period could eliminate those risks - provided their goal is merely to remain in the same city, not their former house. Depending on your timing parameters, that may be a win-win.

Do hope you keep us advised, as it is a very interesting situation.

* Ideally, the atty will be a "Warrior Lawyer" who is either licensed to practice in CA and the state where the new property is located, or at least has/can associate with similar co-counsel in the new state.

[Nor Cal Wahine]

Thank you all for your wonderful responses. I agree that we need to remove emotion from the equation entirely - we do not owe these people anything more than simple courtesy, and I believe that hearing out any offer they are willing to make to us as well as allowing them as much additional time in the house as we can without inconveniencing our own family is simple courtesy.

Frankly, I'm not just feeling badly - I'm a little pissed off at their complete lack of courtesy for our family, or acknowlegement of the concessions we've made to accomodate them thus far. We did some quick math and figured it would cost about 50k above the purchase price of the home in order to get us to even consider making this deal with them ... and considering that they balked over a $35 additional cost to the home warranty they agreed to purchase, it ain't gonna happen.

Our agent is staying in contact with their agent, who is now apparently trying to help them find a home. Sadly, they'll really struggle to find an equivalent property at the price they sold to us for ... it took us over a year to find it ourselves. Our agent will continue to keep us posted and we're hoping that it's nothing more than cold feet and a little sadness at leaving this home, and that they'll resolve their issues and end this deal amicably and without any trouble.

I will happily keep you posted - and thank you all once again for the 'soapbox' I will now step down from.

[PotterGeek]

We did some quick math and figured it would cost about 50k above the purchase price of the home in order to get us to even consider making this deal with them

Really?
Guess they'd better find them another house then...