house dilemma with the sellers

[Thermo1223]

Tell your wife with all respect to step aside and you do what is right which is seek fiscal damages from all of those responsible for this blunder.

I had a similar situation we both saw a house and my wife again really wanted it.

Good price & not listed as a short sale. We make an offer only to find out we need to make a higher offer in order for it not to be a short sale. IE the sellers lied to their Realtor or are too stupid enough to not know their own finances. The sellers try and get a personal loan for the difference. They do but refuse to deposit it in an escrow account. So I basically have to fully trust they won't use the money for some other means when before we close. We ended up walking away from the deal because it was just too long to wait for them. That all took 3 weeks, I closed in our current house in 4 weeks.

The second our realtor found out she made a cancel of agreement form ready for us to sign because she knew that is not what we wanted. She also warned the sellers agent with legal trouble if she knew about this before listing. My realtor works for a large firm so they have a sizable legal dept. You wouldn't believe how quickly the listing got amended.

Your agent is trying to cover his behind by getting you "free" legal advise. He is definitely included in the list of suspects.

Get your own real estate attorney now and include his fees for the sellers to pay. You wouldn't need it if they weren't so dishonest.

 

[ccs v2.0]

Now I understand now why it's taken you so long to even "lean" toward getting a real estate attorney. You have to take your feelings out of the equation, and it appears your wife can't do so. Use your head not your heart.

GET AN INDEPENDENT OPINION FROM A LAWYER ASAP (LEAVE YOUR WIFE BEHIND, when it comes to legal and money matters, if she will be sentimental about the ordeal). I don't normally scream online but in this case I feel I must. There is too much at stake to get you feelings involved in this decision. Everyone but you has looked after themselves if you don't get an independent lawyer that is experienced in these matters.

 

[expat]

ccsv2.0 +1

I admit I cringed when you said your wife cried when all this came down during the walk through.
She should have got MAD!
GET A LAWYER NOW!!!

And for what it's worth, when I saw the pic's of the house (very nice by the way) To me, they just screamed of 'TOP HEAVY'
If I were a Realtor (I'm not, I have too much integrity :-( )
I would have checked the financial aspects of the house, Job # 1

 

[eljefino]

Originally Posted By: ArrestMeRedZ

Personally, if the sellers threatened me with bankruptcy, I'd pursue legal action just to see if they were really broke, and to force them into it. But then again I'm considered "highly retalitory".


+1,000,000,000,000,000

If their divorce isn't final yet they might have to deal with you before they deal with themselves.

 

[Cutehumor]

Well I got the "free" legal advice from the title company lawyer. we talked for 30 minutes. he mentioned the seller's agent is liable in all of this. He didn't mention my agent. Well, he gave me three alternatives:

1) walk away and eat the $30k loss (higher interest rate and lost buyer credit, etc), buy another house
2) sue the sellers and seller agent, pay $5K lawyer retainer fee, and his 210 dollars an hour for who knows how long????
3) proceed with legal action and I win. Sellers file bankruptcy and I would have to pay his legal fees.

The lawyer told me that a short sale takes 1 year to 1.5 year to complete!! This is not right.

 

[ccs v2.0]

Alt. 2) is not necessarily true. If you sue and win, they are also liable for all fees incurred. You won't really know until you talk to a lawyer, will you?

I say if they don't solve this in two days, which they won't, sue all parties involved; some pockets will be deeper than others, but someone will pay.

 

[Win]

It sure looks like a beautiful house, I can see why OP's wife wants to go forward.

It seems that the cart got ahead of the horse in this matter. I come at this with a bias, as a lawyer and real estate investor, but the time to talk to a lawyer is before one ever signs the real estate contract. It's always cheaper to keep something from going to heck in a handbag, or get out before it does, then to try to fix it after it's broken, assuming it can be fixed. It's the legal equivalent of an ounce of prevention is better than a pound of cure.

Competent legal advice, that can be reasonably relied upon to make decisions material to one's particular situation and circumstances, can only come from a lawyer ( repeat, a LAWYER ) licensed to practice in the relevant state (repeat, LICENSED to practice in the relevant state ).

That disclaimer having been made, in my personal practice, for clients and my own holdings, the sine qua non of a real estate transaction is obtaining a marketable title for my client or myself. Marketable title varies from state to state, but generally can be considered to be one that can be readily sold or mortgaged to a reasonably prudent buyer or mortgagee.

So, the first thing on my checklist is determination of the quality of the sellers title, the specifics of any liens or encumbrances impairing title, and what it is going to take to get rid of or fix them them, so that my client, or myself, can have marketable title. Obviously, from the marketable title approach, the problem the OP now confronts would be realized early in the process, and a decision to resolve it or move on to a different deal could be made.

Residential real estate transaction ( perhaps because of the absence of lawyer involvement and a desire to consumerize the process ) seem to be done backwards. They place all kinds of emphasis on home inspections and walk throughs, and things like that, and brush aside title and conveyances to the very end. While these may have a place, more importantly they also have a time, and imo that time is after determination of quality of title problems, not before. Once quality of title problems have been resolved, then you can spend some money on surveys, appraisals, inspections, and the like with some confidence that the money is not going to be wasted.

Look at all the hysteria over who was (is) going to pay for the Koi pond cleaning; its importance is not the $500 bucks, it's the possibility that if unpaid, a lien can be placed against the property that would impair the lender from getting a first mortgage. If borrowed money is involved, anything that prevents a lender from obtaining an unimpaired first mortgage is a brick wall deal stopper until it is resolved to the lender's and title examiners satisfaction.

Anyway, a lot of the things I have learned, I learned the hard way ( i.e it cost me $$$$ ) and I hate to see that happen to others. I hope it works well for the OP and gets resolved to his satisfaction.

And I agree, he should see a lawyer. Better late than never.

 

[LS2JSTS]

Originally Posted By: Cutehumor
Well I got the "free" legal advice from the title company lawyer. we talked for 30 minutes. he mentioned the seller's agent is liable in all of this. He didn't mention my agent. Well, he gave me three alternatives:

1) walk away and eat the $30k loss (higher interest rate and lost buyer credit, etc), buy another house
2) sue the sellers and seller agent, pay $5K lawyer retainer fee, and his 210 dollars an hour for who knows how long????
3) proceed with legal action and I win. Sellers file bankruptcy and I would have to pay his legal fees.

The lawyer told me that a short sale takes 1 year to 1.5 year to complete!! This is not right.



If those are the three options that the Title Co attorney laid out for you, then he is not that good of an attorney. Like I said before, the solvency of the sellers here is not even relevant. The listing/selling agent and their broker are the ones with exposure here. They have Errors and Omissions insurance and they ARE at fault here. The seller has no responsibility to inform you of the short sale status of the offer at hand. The AGENTS do, and they dropped the ball.


I'm pleading with you man, don't listen to your wife, you cant let emotions rule the day. Get your own attorney before you talk or sign or do anything further on this loan. It will be money well spent, I promise you.

On a side note....I dont know what he is talking about 1 to 1 1/2 years to close on a short sale. They can and do often take months to close on, but I've also seen them come together quickly. If there is a cash offer on the table, often the bank will jump at it. It all depends on the bank, and their motivation to offload the property. But 1-1.5 years???? I'm not convinced that attorney either doesnt know, or doesnt want you to know......That statement of his makes me wonder what his true motivation is here, sounds to me like he is trying to cover your agents butt and just convince you to walk. Regardless of what he said, both agents have liability here. Yours and the sellers agent BOTH dropped the ball.

 

[expat]

If I read this right, 28k will drive them into bankruptcy?
My guess is they would rather to go under for 10 times that!

But as LS2JSTS put it, it's the Agent you should go after.

 

[sciphi]

After reading this, good luck! I hope you get your house and stay afloat!

 

[Cutehumor]

I forgot about a couple of things I got with the legal free advice I got.

The contract we signed, the wife signed only. the husband did not since he's in arizona, but they communicated with each other on the price of the home. but I was ASSURED that the wife has a power of attorney over the house by my agent, so it's a legal contract. The lawyer said that was an easy way to get out of the contract because the HUSBAND did not sign!!

 

[LS2JSTS]

Did your agent provide you a copy of the power of attorney? If he didn't, which I suspect, then tell him you want a copy of that poa immediately.

Frankly, your agent is a hack.....I don't mean any offense, if its a family member or a friend I apologize. But I wouldn't buy a dog house from either of the agents involved in this fiasco.

In any case, that contract may still be legally binding, in the State of Michigan anyway. Not sure about your state, but in Michigan a wife can sell or buy property without a husbands consent.....BUT a husband can not do the same. Have you seen a copy of the current title policy? Is the house owned in both their names or just the wifes?

 

[Cutehumor]

no, I didn't get a power of attorney. I trusted my agent when he said the wife had the power of attorney for the house and he said it was legally binding. I asked twice about having the husband sign too. I agree, something is royally fishy. My agent is a agent/broker with over 20 years experience. He was named a top 25 agent in Nashville according to Nashville business journal. This guy has listings for multimillion dollar homes and bragged when we were interviewing him that he never been sued before. I thought I went with the best, but it just shows that a rep doesn't mean anything. The house is owned in both of their names according to the TN property assessor's office.

My agent told me that he talked to the title company lawyer for 30 minutes about what we talked about. watching his back no doubt!

 

[ccs v2.0]

At best both agents are negligent, humor's more so than the seller's, but they both have been negligent. The title company's lawyer is just doing his job; looking after his employer's best interests.

You may not be able to fix stupid, but you sure can make them pay for their stupidity vis a vis punitive damages.

 

[LS2JSTS]

Originally Posted By: Cutehumor
no, I didn't get a power of attorney. I trusted my agent when he said the wife had the power of attorney for the house and he said it was legally binding. I asked twice about having the husband sign too. I agree, something is royally fishy. My agent is a agent/broker with over 20 years experience. He was named a top 25 agent in Nashville according to Nashville business journal. This guy has listings for multimillion dollar homes and bragged when we were interviewing him that he never been sued before. I thought I went with the best, but it just shows that a rep doesn't mean anything. The house is owned in both of their names according to the TN property assessor's office.

My agent told me that he talked to the title company lawyer for 30 minutes about what we talked about. watching his back no doubt!


I feel for you man, I really do. This is a FUBAR situation if I've ever seen one.

Sometimes the busiest agents let some things fall between the cracks, whatever his rep is, he dropped the ball here. I would demand to see a copy of that power of attorney forthwith....no hesitation. I'm betting he cant produce one.

Again man, good luck.....and sorry for shouting at you but, GET AN ATTORNEY THAT IS WORKING FOR YOU, not someone who golfs with the agents and works with them on a regular basis.

 

[Thermo1223]

Personally at this point, I'd start looking for another realtor...

 

[bigmike]

If I just read this all at once, I'd think it's a scam on 3 people's parts: the agents and the person that signed the paper.

I'd not only invest in the lawyer, which was a recommendation I made as well as several other people here, but I'd be thinking of getting some agency or person involved higher up the chain of command in your state. None of this sounds legit or this is just the perfect storm of scenarios.

I wouldn't even open my mouth, answer a phone, or sign a document until the real estate lawyer was involved.

 

[expat]

Clearly one or other (or both) of the Agents are to blame.
They should pay, they CAN pay, they should be sued, they will pay your legal expenses.

In my mind, No more talking with you agent.
Don't try and sort this out yourself.
Get a consultation with a reputable Lawyer NOW!

I am 53 years old, I bought my first house when I was 20.
I don't like to 'Run to a Lawyer' either (without good reason)
My advice is unbiased.
There are a lot of people on this site just like me. Many I'm sure have MUCH more experiance in these matters.
Listen to what us old Pharts say.
Experience can be hard earned!

 

[mrsilv04]

And to think.... a week ago, you thought that a $500 bill for cleaning the koi pond was enough to raise your blood pressure...

Now, its the least of your worries.

 

[Cutehumor]

At this point, I'm leaning towards walking away from this short sale if we don't close in 36 hours!! My wife wanted our agent to do an addendum to our contract to allow the sellers up to 5/10 to get the money for closing. If they don't sign it, I'll know for sure they have no intention of closing. The "I'll apply for a "note?" to pay the 28k" was a ruse to make us feel better I bet.

I just realized the concessions he made in our contract: 10 Koi fish, two flat screens mounted on the wall, washer/dryer, grill, and patio furniture will be gone if we don't close. what's that an additional $4K I lost? not including the $8k home buyer credit. That free advice I got from the attorney did say I should write a letter indicating my damages and send to the seller as a threat.