Home buying insanity - if things seem too good to be true, they probably are.

EricF · #1 05-03-2010, 04:12 PM

After 7 years of raising a family (2 kids - 5 & 11) in a 2 bedroom condo, my wife and I decided it was time to get the place on the market, and get into a house with a decent yard where the kids could run around and we could enjoy some private outside space. We had plenty of equity in the condo that would allow us to put a 20% down-payment on a decent house in our area.

A couple of months filled with weekend renovations and repairs to the condo, and we put the condo on the market April 15th. We priced the condo agressively for the market, and very quickly got people calling wanting to see it. Good news!

Last Wednesday - not even 2 weeks after listing - we recived an offer. It was quite a bit lower than we were willing to accept, but after counter-offers back and forth, we came to an agremment and accepted their last offer on Friday (April 30 - last day of the home-buyer tax credit eligibility). The buyer was planning to pay with cash, didn't want us to do our planned upgrades to the bathrooms or paint, and had waived the requirement for a home inspection and appraisal. This meant that escrow would probably be able to close in about 1 week. For us, that meant cash in our pocket soon - yay! The deal also included 60 days of rent-back from the buyer so we had time to find a new house. With the exception of giving up some money on the purchase price, we could not have asked for a better set of terms to fit our needs.

On Friday evening, we went out with our agent looking at a couple of potential houses to buy (we had already seen close to a dozen by this point), and came across one that was too good to let go. A big piece of property (for the area) and a larger than average house (for the price range). We wern't able to see the inside of the house on Friday, but based on the yard alone, my wife and I quickly came to the conclusion that that house would have to be a total basket-case for us to pass on it. On Saturday, we saw the inside. It needed a lot of upgrading, but it was livable for the time being, so we quickly went about getting an offer written up, our deposit turned over. The offer was sent to the buyer's agent that afternoon. Things were certainly happening quickly.

This morning, we awoke to news that we should be expecting an answer in writing on our offer during the day today. At around noon, it came. Accepted!

...

...and that's when the rest of the news came.

The buyer for our condo has disappeared. Apparently, he had gone to New York for the weekend, and subsequently vanished. The buyer's agent contacted our agent and informed him that the buyer never submitted the required deposit check. The deal is off.

So now, I have a purchase agreement on a house in place and moving forward. I needed the cash out of the sale on the condo for the down-payment on the house to make everything flow smoothly. The condo is going back on the market with hope that we can get another buyer very quickly, and I'm scrambling to come up with a fat stack of cash for the house purchase.

/vent

MJ5150 · #2 05-03-2010, 04:16 PM

Sonofa.....

I was just fixing to say I was going to be down in your area in a couple weeks and could stop by to do any drywall repiars you needed done on the new place.

-Mike

burk48237 · #3 05-03-2010, 04:18 PM

I would definitely contact a lawyer. An offer to buy a house in MI is a contract from my understanding. At the very least you have the makings of a law suit to recoup some of your losses.

MakiSupaStar · #4 05-03-2010, 04:18 PM

Quote:

Originally Posted by EricF

After 7 years of raising a family (2 kids - 5 & 11) in a 2 bedroom condo, my wife and I decided it was time to get the place on the market, and get into a house with a decent yard where the kids could run around and we could enjoy some private outside space. We had plenty of equity in the condo that would allow us to put a 20% down-payment on a decent house in our area.

A couple of months filled with weekend renovations and repairs to the condo, and we put the condo on the market April 15th. We priced the condo agressively for the market, and very quickly got people calling wanting to see it. Good news!

Last Wednesday - not even 2 weeks after listing - we recived an offer. It was quite a bit lower than we were willing to accept, but after counter-offers back and forth, we came to an agremment and accepted their last offer on Friday (April 30 - last day of the home-buyer tax credit eligibility). The buyer was planning to pay with cash, didn't want us to do our planned upgrades to the bathrooms or paint, and had waived the requirement for a home inspection and appraisal. This meant that escrow would probably be able to close in about 1 week. For us, that meant cash in our pocket soon - yay! The deal also included 60 days of rent-back from the buyer so we had time to find a new house. With the exception of giving up some money on the purchase price, we could not have asked for a better set of terms to fit our needs.

On Friday evening, we went out with our agent looking at a couple of potential houses to buy (we had already seen close to a dozen by this point), and came across one that was too good to let go. A big piece of property (for the area) and a larger than average house (for the price range). We wern't able to see the inside of the house on Friday, but based on the yard alone, my wife and I quickly came to the conclusion that that house would have to be a total basket-case for us to pass on it. On Saturday, we saw the inside. It needed a lot of upgrading, but it was livable for the time being, so we quickly went about getting an offer written up, our deposit turned over. The offer was sent to the buyer's agent that afternoon. Things were certainly happening quickly.

This morning, we awoke to news that we should be expecting an answer in writing on our offer during the day today. At around noon, it came. Accepted!

...

...and that's when the rest of the news came.

The buyer for our condo has disappeared. Apparently, he had gone to New York for the weekend, and subsequently vanished. The buyer's agent contacted our agent and informed him that the buyer never submitted the required deposit check. The deal is off.

So now, I have a purchase agreement on a house in place and moving forward. I needed the cash out of the sale on the condo for the down-payment on the house to make everything flow smoothly. The condo is going back on the market with hope that we can get another buyer very quickly, and I'm scrambling to come up with a fat stack of cash for the house purchase.

/vent

Dude. This exact thing happened to my parents many years ago. Long story short it translated into a 50k settlement for them.

Joe Gress · #5 05-03-2010, 04:20 PM

The hardest part of selling a home I saw with my parents was getting both ends of the parties to happen at the same time. Really does suck.

MatticusMania · #6 05-03-2010, 04:22 PM

If ever there was a time to be suit happy, now is that time...

RWP · #7 05-03-2010, 04:23 PM

Sucks. IMHO Buying, selling, moving is HUGE stress and never seems to go smoothly. Hope you get it worked out.

Jonyak · #8 05-03-2010, 05:20 PM

the guy broke a legaly binding contract and you are owed compensation.

go after him.

EricF · #9 05-03-2010, 05:49 PM

I am current investigating what recourse, if any, I have against the (intended) buyer.

playinpearls · #10 05-04-2010, 07:17 AM

definetly go after him. Hire the nastiest TV lawyer known in your area and feed him raw steaks...

People joke about TV lawyers sometimes....but there was one in the virginia beach area that i heard never lost a case, and had more out of court room settlements than most other lawyers... Lowell "The Hammer" Stanley, lol!

Relic · #11 05-04-2010, 07:34 AM

Oh good lord, that sucks royally..... I'm also in the process of buying a house. I'm so stressed out that I'm ready to scream
Dude, you and me need to have a few beers.

Pilgrim · #12 05-04-2010, 09:18 AM

And that's why you don't move on the next house until you at least have a non-refundable deposit and written agreement on the one you're selling. I doubt you can do anything about a verbal offer, even if it's technically binding...although it's worth checking with a lawyer. My best is that you're best off to move on and concentrate on selling the place.

EricF · #13 05-04-2010, 09:42 AM

We had a signed agreement, but the Escrow process never got started becuase the buyer never submitted his deposit check. My only recourse at this point would be to take him to arbitration (per the agreement), if the guys can even be located, but I'm not willing to spend the time and effort with right now over what will probably not amount to much, if anything. I need to concentrate on getting things on track again.

Although it's a real bummer that both deals didn't come together as planned, I'm thankful that we are now in Escrow on the new house, and things are going well with that. The place is really a fantastic score for our family (pending inspections, of course). Having a big yard and a pool is more than we were hoping for. If it wasn't for having a deal in place on the condo, I never would have considered making an offer on the house. It's just another challenge I'll have to deal with to get us into this house.

For situations like this, I'm a firm believer that things will eventually work out the right way, even when it seems like they won't.

Our agent has 4 people coming by to see the condo today. I'm keeping my fingers crossed.

EricF · #14 05-04-2010, 09:43 AM

Quote:

Originally Posted by Relic

Oh good lord, that sucks royally..... I'm also in the process of buying a house. I'm so stressed out that I'm ready to scream
Dude, you and me need to have a few beers.

If we ever end up in the same part of the world at the same time, a beer - or six - sounds like a damn good idea.

L-A · #15 05-04-2010, 11:11 AM

The opposite happened to my friend. The 47 year-old seller sent the buying contract back to them unsigned, explaining that he had spoken with his mom and that, after all, he wasn't ready to move on.

EricF · #16 05-04-2010, 11:26 AM

Quote:

Originally Posted by L-A

The opposite happened to my friend. The 47 year-old seller sent the buying contract back to them unsigned, explaining that he had spoken with his mom and that, after all, he wasn't ready to move on.

That's funny right there!

Pilgrim · #17 05-04-2010, 11:28 AM

Since the guy has vamoosed, you're probably out of luck there...but having four people coming to see the condo is GOOD news! Hope it turns quickly.

You are now a "motivated seller".

EricF · #18 05-04-2010, 11:45 AM

Quote:

Originally Posted by Pilgrim

Since the guy has vamoosed, you're probably out of luck there...but having four people coming to see the condo is GOOD news! Hope it turns quickly.

You are now a "motivated seller".

I was "motivated" before. Now, I'm "extra-super-mega-motivated", but not "desperate"...yet.

We've had lots of interest in the condo right from the beginning, but some people were scared off from making an offer because we needed a 60-day rent-back in the deal. We won't be needing that now, so hopefully we'll be in a better position.

One of the biggest bummers for us is that the intended buyer of the condo was willing to take the condo in its current conditon and we wouldn't have to continue with our planned upgrades and repairs (we had reduced our selling price accordingly). Now, it looks like the next couple of weekends will be filled with replacing bathroom floors and toilets, and painting. Also, having to keep the house in showroom-clean condition every day is getting damn tiresome.

Relic · #19 05-04-2010, 01:53 PM

Well whatever happens - GOOD LUCK! I think that you should be able to sell that condo asap without the rent back clause. Just persevere for a little while longer with the repairs/upgrades and you'll be good to go.

We're under contract at the moment for our dream home - lots of land, swimming pool, it sits on the side of a mountain, but now we have issues with radon, possibly an illegally installed septic system and a host of other things that I'm trying to work out before we close... it's really p**ssing me off. It's not so much that I've been having bad luck, it's the price range that we're looking it. It's at that right in-between amount where you can chose a tiny house with a little land that's in perfect walk-in shape or a nicer bigger house with a problem or two.

EricF · #20 05-04-2010, 04:17 PM

Quote:

Originally Posted by Relic

Well whatever happens - GOOD LUCK! I think that you should be able to sell that condo asap without the rent back clause. Just persevere for a little while longer with the repairs/upgrades and you'll be good to go.

We're under contract at the moment for our dream home - lots of land, swimming pool, it sits on the side of a mountain, but now we have issues with radon, possibly an illegally installed septic system and a host of other things that I'm trying to work out before we close... it's really p**ssing me off. It's not so much that I've been having bad luck, it's the price range that we're looking it. It's at that right in-between amount where you can chose a tiny house with a little land that's in perfect walk-in shape or a nicer bigger house with a problem or two.

Thanks, Relic. Good luck to you, too.

That's the exact same kind of choice we had to make. We also chose the bigger option with more work needed.

If everything goes smoothly, we'll be closing Escrow at the start of June. Upgrade #1 - central air conditioning. I will not go through a summer in So Cal with my wife being overheated. Been there, done that. I'm not going to make that mistake again.