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Yes they've been in their current house 30 years. SIL moved in with them years ago and they put the house in her name. (I'm going by what they told us) So now it's SIL's house. The new house is in pretty good shape. So yes less work. But the new house is double what they are selling the old house for.
There is for sure a debt to income ratio problem. She's telling us it's her credit score giving them trouble. Which maybe it is or maybe she's not telling the truth. We were convinced SIL would never qualify for a mortgage. But I guess if your down payment is big enough, banks don't care? The only thing working in her favor is that down payment. That's it. Aside from that, she's no better qualified to buy a house than my cat is. This whole thing makes me far more nervous than they are.
At least I've gotten some helpful info in this thread just for my own knowledge so there's that!
The biggest thing to remember when she calls for money? No is a complete sentence. You two not bailing her out might be the thing she needs.
If Bob is collecting a commission in this transaction, he has to follow his state’s code of conduct as an agent. If he’s helping everyone out for free, he has no legal requirements on him. I suspect he’s getting a kickback of some kind from his flipper friend and is putting their interests ahead of those of your sister. When they learned he was representing the buyer, they should have engaged their own agent.
If they needed the sale to be contingent on them closing on another home, that needed to be in the contract from the get. Asking the buyer to make that change at this late stage would likely cost them $ you said they don’t have.
This is one of the most misunderstood concepts ever: "If he’s helping everyone out for free, he has no legal requirements on him."
Compensation is NOT linked to duties and responsibilities for a licensee. Not ever. Not at all.
If Bob is working a transaction between parties and Bob holds a real estate license, his legal and ethical duties are fully intact.
But seriously, does that happen where people sell their old house and can't get into the new house? What happens then? I honestly feel bad for their buyer because he thinks he's giving them a week to get out and they'll end up squatting in that house until they are kicked out. That's how they are.
It's not surprising that at the 11th hour they still don't know if they will close.
to the first ... not long ago the "son of elderly Sellers" asked if they could be forced to close because the closing was a week away and basically they hadn't arranged movers ... and didn't sound like they even knew where they were going. Was it cold feet or was it ignorance? He didn't seem to care, just that they should be able to delay just because they decided they needed to.
In your case, it's an investor, so he *probably* doesn't care if it's a week or 2 weeks later.
If your people are as poor planners as you say, they may easily have blown through all deadlines to provide info, and have now come to the realization they really ARE going to have to jump through all the lender hoops. And the lender may have originally relied on the information they (inaccurately) provided - "we'll have a 50% down payment and the parents have good credit and will co-sign". Now the lender has found out how bad off they are, and is scrambling to find any port in a storm for them.
Last edited by BoBromhal; 04-11-2020 at 07:11 AM..
I would say to the OP also that everything you're hearing about "Bob" is via the sadlack SIL who has a history of stupidity.
as someone else just said - and as I said - you have a relationship problem, not a real estate one. If your husband is the black sheep (which implies not that he's the "good one" of the family, rather that he's ostracized), then I don't know why y'all keep helping these people. Even if he is "the good one", then these are all long-time adults and he can let them sink or swim on their own, and you can quit worrying about your out-laws.
Curious if all all went well yesterday in the sale. I personally would not help them out anymore because they seem to want to get in over their heads knowing that you will bail them out. I would very tactfully tell them that the well has dried up and you can’t jeopardize your own finances. I wish you luck!
Since the buyer is a flipper, he probably would be okay asking for an extension on closing or a longer rent back. He doesn't have to, but if he wants this flip, he probably will. SIL and parents sound like they will just need to start looking at rentals unless at least one of them has a decent credit score and proof of adequate income and good debt to income ratio. Not everyone needs to own a home, and if they can't afford the mortgage payments, they sure as heck can't afford the insurance, taxes, maintenance and utilities.
Mother in law is aghast at the idea of renting. They have never rented in their lives and they are in their 70s. They lived with different family members and then bought this current house in the early 80s with money they got after FIL's grandmother died and they sold her house. Their current house cost 23k when they bought it in the early 80s. They lucked out getting the inheritance money.
We found out that the closing is supposed to be this Wednesday on their new house. If that closing falls through, they planned on just sitting in the house and trying again to get a different mortgage.
BoBromhal I think you're right that they probably gave the lender a lot of wrong info and now they are scrambling for a mortgage they never had. Their ace in the hole with be the 40% down I'd think. Are lenders still fussy if a buyer has 40% down?
From what my MIL has said, the buyer of their house is just representing himself. Bob is representing my inlaws on the sale of their house and the purchase of the new house. I can appreciate someone working hard for a buck. I just know my inlaws and they are not the kind of people to just up and move without a lot of cheerleading about how easy it will be to sell their house and buy another. So Bob has been pulling the strings here. And telling them that "his people" could get them a mortgage was wishful thinking on his part.
My husband is a rational person but quickly becomes a bleeding heart with his parents. So he's not going to leave them twisting in the wind if this falls through. Believe me, I'd love to. I'm over their irresponsible financial mistakes. But my husband is mortified at the chain of others who will suffer because of my inlaws like the buyer of their house who is going to have to deal with squatters. And the people selling the new house who think their house is sold and can find out at the last minute that it's not. The sellers of the new house are also retirees who have an RV and are ready to start traveling. I honestly feel bad for anyone who gets caught up with these shysters. They think they are just helping poor, old, hard working folk but they are really being taken for a ride. MIL gleefully told my husband when he called her for Easter today that, "The buyer can't kick us out! There's nothing he can do!" Like she's loving the idea of squatting in her own house. Grrrrrrr
So we said if the closing falls through we are going to try to offer another 10%. That would be putting 50% down. So we can see if that works.
If that doesn't work, we'll take the money we have saved for when we buy our own house and purchase the house for them minus their 40%. That sucks because we are in Southern California where 600k gets you a nice starter home. We sold our house a few years back and have been saving to be able to put 50% down on our own house. But that's our plan.
And I told my husband just be prepared. If they have a house that's paid off, that's a nice blank slate for them to start taking out equity loans and having blow money like they did with their current house.
Anyway I'll update you all after Wednesday.
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Solly says — Be nice!
