Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have been trying to buy a house for three months now and I feel like I am being jerked around by the listing agent of the home, the seller, well, everyone!! Even my lender is getting annoyed, and we have used her a few times and have a great rapport with her. Here's the story:
1. When we first looked at the home, I noticed that the roof looked rough and the a/c was missing. I commented that it needed a lot of work and may be beyond our means to fix it. The realtor told us that the a/c had been stolen and would be replaced as soon as there was a binding agreement. That seemed to sweeten the deal for us. I mean, it is a great house. It needs a lot of cosmetic inside and a roof, but we felt like it was worth it. I asked for documentation of the insurance agreement when we signed contracts and still have not received this information. That was Sept 1. It is now November. I am supposed to take the sellers word that "it will work out".
2. It took one month for them to counter offer. Then they realized they would have to do a short sale. The home has been on the market for a long time and has basically been abandoned. There are no utilities on and they owe the utility companies money. It took another month for them to understand what short sale was, I guess, and the tax repurcussions of this type of deal. But basically they have been uncooperative since day one. Too busy to return the realtor's calls, etc.
3. Even after we figured out that we would have to go the short sale route I told the realtor that if the a/c was covered under insurance we would still expect the a/c to be paid for. I mean, why buy it if it is covered and can be replaced by neither the seller or the buyer? We are now two weeks away from close, pursuing an FHA loan and the a/c has to be installed before FHA will approve it. The seller has gotten estimates (we are told, but we have not seen this) as well as confirmation that the insurance will cut him a check (we still have no documentation on this). I asked when the seller would be compensated for the a/c so we could proceed and she said "anytime", which seems fishy as most companies have time protocols regarding such claims, like 5-7 business days, or weeks, or whatever. Not to mention the fact that at one point, the realtor said "I don't even think it is insured at all", which was alarming, but then she said again that she's "pretty sure" it is. Again, what she thinks/he says is not good. Why can't I just "promise" to buy the damn house, on that logic? That's why we have contracts, duh.
3. She is rushing us to close the house, lately, claiming that the ball is in my lender's court. It is, but we need her guy to do what is supposed to do too! I keep telling her, we're waiting for you guys to put in the a/c. My lender has already done her stuff, the lawyers and their bank are communicating and have set a date. The inspector from the bank is coming in a few days and he still has not even made an appointment to have it repaired!! I find it hard to believe in this day and age of communication that he could not make a 10 second phone call and ask when a company (who has already finalized an estimate) could do the work!!
4. I asked the realtor about the utilities. She told me FHA does not need to have them on, and I questioned this b/c we are not first time home buyers and have used FHA before. Then the inspector contacted her for an appointment, and yes, the do need to be turned on. Now we're supposed to turn on the utilities ourselves. I did hope that it would be easier for us than for them, and they seem so resistant I felt like hell would freeze over before they turned them on. But a realtor who is listing a home knows that the utilities have to be on. So get them on!! It's the sellers responsibility, not ours. I am trying to be as flexible as I can!
5. The actual seller of the house has never signed anything. Her husband does it for her, we have never seen her. Is this forgery or is it o.k?
6. We are not represented in the sale. Yeah, I know, but when we found out the details we knew that the bank would cut the realtor commission and we did not know how that would work and wanted to be fair to her. At this point, our communication starts out almost forced-friendly but you can tell it is just not jivving. I am dreading talking to her and I think she dreads talking to me too. It's like she wants us to be completely agreeable about everything, but we have to protect ourselves too! A home is a big purchase, and not one to go into without thinking responsibly.
7. I feel like the realtor is asking us to do things that are not our responsibility (and she wants them done quickly!!) while the person she represents can drag his butt all month without doing what he supposed to do! And then we are nagging her to ask what the progress is. Plus, I do not feel that she is being honest with us. I am trying to be patient, I think this is her first short sale, but she will say things like "he can just borrow the money for the a/c and get reimubursed" so I think, that sounds reasonable, and then I find out that's not an option at all. And she gets mad if I mention it as an option later!! It's like she just tosses ideas out there, trying to make it work, and the ideas are not always realistic ones, which is unfair to both us and the buyer. I mean, if borrowing the money to repair the home is not an option for the seller, why bring it up at all? And is it even any of our business? We just want the a/c in!! I think she is just desperate to sell this house and I am trying to be understanding of this. What should I do!?? Please help!
Run, don't walk, away from this house. Sounds like they are looking to sell you a house with major defects in the hopes that because you don't have representation you can be bullied into accepting all of their terms. Short Sales in general are a giant waste of buyer's time. Yes, a few work out well, but the majority don't.
You've made so many mistakes on this purchase it's hard to know where to begin. You say you're not a first-time homebuyer, but you sure act like one.
First and foremost - the listing agent works for the SELLER. They can sound sweet and helpful all they want, but they have a legal duty to the SELLER, not you. DO NOT worry about being fair to the listing agent. That's not your problem. Worry about YOU.
The SELLER pays the commission. Even if you use a buyers agent (which you should have!!!!!!!) the SELLER pays the commission. The commission agreement is part of the listing agreement - it has NOTHING to do with you.
On top of that, their agent seems to be an idiot on the financial side. He/she should have known about the potential for a short sale and explained the ins and outs of that to their client long before you made an offer.
Your purchase offer should always have a short expiration, like 2-3 days at most. NEVER 30 days - good grief.
ALL real estate agreements must be in writing. NEVER take an agents word for anything that "it will get done". You should have put in your offer that "A/C must be replaced" or something to that effect.
Their time for due dilligence on making repairs, replacing the A/C, etc., should have already expired well before the closing. If they haven't done what they were supposed to due within that time period, you should be able to cancel the contract.
FINALLY - AND THIS IS A BIGGIE - you said "The actual seller of the house has never signed anything. Her husband does it for her, we have never seen her." Do you know this for a fact? If the husband actually signed the purchase offer, and he does not own the house himself, and unless he has a properly executed power of attorney from his wife to act on her behalf in this sale, YOU HAVE NO VALID PURCHASE OFFER IN EFFECT. In fact, this may constitute FRAUD on the part of both the husband, the owner, and the agent. You should be able to get your earnest money back and walk away. You may have to threaten legal action or contact an attorney if the selling agent balks. BE TOUGH - Be polite, but in no uncertain terms, tell the agent AND their broker that you will report them to the appropriate real estate licensing authorities AND will contact the district attorney's office to discuss filing fraud charges against them. In fact, in addition to your earnest money, demand that they reimburse you for any actual expenses you have incurred.
Next time, get a buyers agent. It costs you NOTHING, and you're clearly not able to do this on your own without assistance.
We wanted this house which is why we were patient. I had my inspector look at it, for free, before we even put and offer in and he was very excited about the home. I've used him in the past and he's very thorough. What he does for us is look at it before we offer, so we don't waste our time. He said, this needs some work but pursue it, it's just the roof and air. If you get the a/c for free, it is totally worth it at 90,000.
The deal did expire, a few times, and we renewed our offer. We backed out about a month ago, actually. Then the realtor called and said that the short sale was a go, the sellers had done their part and applied and the bank had done the appraisal and was ready to negotiate.
The a/c is in the contract, in writing. We don't close until the a/c is in. I'm just frustrated that we have done all of this and then the deal with fall apart at the last minute b/c he won't put the a/c in. But it is in the contract and has been since day 1.
And as far as her not signing, I did not know this until we signed our counter offer to the bank a week ago. I never saw these people until then. Then I noticed he signed for her.
As far as time goes, it is different with a short sale. Yes, our first offer expired, I put a timeline in. Then they contacted us again and we resigned. I think they were figuring out about the short sale, the ramifications, and foreclosure. This was during the bailout period so a lot of people thought that meant something for their loans--i.e., they would personally be bailed out. They put together the short sale package and submitted it to a bank. It is not a like a regular deal. The bank gets a certain amount of time to review the package, do an appraisal, submit to an negotiator and so forth. It takes longer than 10 days!! This has nothing to do with the seller. Their insurance would not pay until we had a binding offer, which means, the bank accepts the offer, not the seller. In a short sale, the sellers power is taken away.
We knew a short sale took time and patience. As far as due dillegence and all that goes, until the bank accepts your offer you don't have a binding offer anyway. So since we only had a binding offer as of last week, they still are in due dillegence, technically. What has to happen is that the seller gives it over to the bank and then they are in the drivers seat. You are privvy to what they want to do, and it may take weeks for them to agree to the short sale, the terms in the contract, etc. At least that is what I am being told by other realtors, the internet, my lender. Hey, this is new to me too! Considering I'm not a realtor I think I'm hanging in there!! There isn't another house like this. We want it, it's frustrating, but I don't want to walk away at this point. We already did and after a month of thinking it over we felt like it was worth the hassle. I offered low enough assuming this a/c wouldn't work out in the first place. It's just the compresser, not the whole thing, and it can be put in for 2,800. I can always do another loan, non-FHA, and do the house as-is, put it in my damn self. Even without that money towards the home, it is still a deal. That is why I hung in. And even if in this market "values don't mean anything', it will still be cheaper to own this home than to rent anything that is suitable for a 50 pound lab, two growing sons and us.
First off you should have hired a REALTOR. You don't have anyone looking out fore you and it is free to you.
Second; if the house has been vacant for more than 30 days the insurance doesn't cover the A/C.
Third; anytime you are doing a "short sale" you have to be patient. A year ago the bank negotiator may have had 20 files for short sales on their desk, but now it may be 1500 that have to be handled. They are under pressure to get these files done and to handle every one of them; with banks making no money they are not going to hire extra people to handle these files, so there may be one person doing this much at once.
Fourth; you should not go FHA, because of the requirements to get the loan. If the people are doing a short sale, they probably can't repair the home and you will not get approved.
Fifth; If you make your offer to the bank too complicated you could sit on the negotiator's desk because of this fact alone. These guys only get paid about a $100 a closing. There incintive will be to do the easy ones first, if yours is complicated or has too many demands (stipulations and contingencies) the will put it to the side and work on the easiest and fastest to close.
Make sure that the husband has "Power of Attorney" when he signs for his wife. Who is on the tax records as owner? if they both are you are OK if not make sure you have a copy of the POA, upfront.
If you have decided to hang in there, you will get a bargain on the home. Have patience....Bill
O.k, we closed Tuesday!! Yay!! And you were right, Ollie, we did want this house, and it was totally worth the stress. I was just losing my mind about these people and wanted to make sure I was not completely crazy. It's nice sometimes to vent to an uninvolved party. People's responses were just a little harsh, ouch!!
The A/C was put in, not sure about the 30 day rule mentioned on an earlier post, I haven't heard of that, but thanks for the heads up. The seller really dragged his butt on the repair, but it happened and FHA approved it. I actually called their insurance company to check the status of the claim and the realtor heated up over that. I told her that if she had given us information we wouldn't need to seek it out ourselves, and that 5 days from closing we deserved some answers.
Funny, I mentioned the husband-signing-for-the-wife thing to my attorney, well, the closing attorney rather, and he did not seem to think it was a big deal. Goes to show what a help those guys can be!! He said that the majority of house contracts are technically signed incorrectly, even if it is a builder signing his own name when it's really a LLC or corporation. And that husbands signing for wives and vice versa if very common. So I basically looked paranoid to everyone when I was trying to look out for myself and question what I thought was, well, basically fraud.
I was so worried about their bank's end of everything, but EMC Mortgage actually handled it quite well. Their realtor wound up fighting with my lender about the closing date, which got postponed--not our fault, so it was kind of hilarious that the sellers and their realtor got mad about it. I mean, it took them a month to put in the damn A/C!! FHA was waiting on them.
So yes, it was crazy, but if you love a house enough I guess it is worth it. We got a 1700 square foot house, fenced, 1/2 an acre, pecan, oak, lemon, fig and pear trees, with a 10 by 12 actual log cabin in the back (we're going to use it as a fort for our sons!) for 90,000. Not too bad!! Now if someone can just help me put in this damn flooring, hahaha!!
So Glad to see you were successful! Short sales don't have to be so very bad when the agents are properly trained to do them. They can be a disaster when not. And one final real estate note- if you have a binding agreement which contains conditions not being met (either by seller or buyer) the other party can sue for performance - which means that they have to sell / buy the property as agreed upon. I'm happy to hear you didn't have to go that route though! Enjoy your new home.
Wait! You don't have an Atty and you don't have a Buyer's Agent (Realtor)?? Are you sure you're not a first time buyer? First of all, a short sale means the Seller of the home IS NOT responsible for fixing anything anymore because he/she pretty much had to turn the property over to the bank because he/she was in default, this is not something they all of a sudden realize, they knew from day 1 they were in default and the listing agent needed to disclose this to you AND your Realtor if you had one! The Seller is not responsible for the fixings since they obviously didn't have money to pay the mortgage, where do you think or why would you think they would fix anything in a property that doesn't belong to them anymore and where they are walking away with absolutely no gains from? I mean I just don't get it, why in the world would you not use a REaltor???? It's not like it's costing you anything for that REaltor's time, professionalism and expertise....something you are definitely lacking now. Second of all, short-sales take time, it's not something where You set the closing date and it's going to get done, you are not dealing or counter-offering with the Seller anymore, you are dealing with the lender and no matter what you do, you need to wait for the lender to give you the go. It seems like you are stuck. Either go get youself a Realtor that speciaizes in short-sales along with a great Atty that also specializes in short sales OR walk away.
Last edited by Joad99; 12-28-2008 at 12:14 PM..
Reason: misspelling
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Advice?
