Real Estate Follies
57
Why Me?
Well to begin with it has been almost 5 years since I sold or purchased real estate, so alot of things have changed, for instance, you can no longer have more than 1 FHA mortgage. One of the advantages of FHA is as little as 3% down. In 2005 we owned 2 homes that were financed FHA, both have been sold, but it worked out great for us. Ok, so you can't do that anymore, and it's great that they stopped the sub-prime mortgages. In other words you have to be well qualified to borrow hundreds of thousands of dollars, which I don't know why lenders were loaning to people with poor credit scores and low income qualifications in the first place, a sign of the times I guess. Why am I telling you this?
Previously when I complained about the neighbors goats trespassing, I mentioned that we would be moving because our home had sold and we were purchasing a new one. This may not be so. I may have goats for neighbors for a while. It seems that our home appraisal came in under the sales price. Sales price was determined by our real estate agent, but it is almost 17 thousand under the sales price. We agree to sell for the appraised price, and are waiting to hear on that right now. But in the mean time the buyer has expressed that during all of this she has not made some payments and may not be qualified to purchase our home, since a final credit report will be pulled for financing. So this is wonderful because also in the mean time, our realtor had us in a rush to have our septic pumped, $370.00, get a health letter, $202.00, and since we had to find another home, we are also out $550.00 for the appraisal on the home we may never move into. Luckily, if it comes down to it we can still get our $1000.00 earnest money back from that home.
So I am wondering, why this is happening, when I mentioned to my agent that we shouldn't have had to do the septic and health letter, she suddenly had another call and hung up. Haven't talked to her since. When we made the decision to sell and move, we purposely decided to go with an agent instead of for sale by owner, because of all the changes in the market and times. We knew we did not know enough any more to do this ourselves, so we had professional help, right? And this help costs a pretty penny at 6% commission. So I have to ask, has this happened to anyone but us?
We will find out soon if we have to put our house back on the market and start over. The good news is that the septic and health letter are good for 3 years, so I guess that pain is out of the way, but on the other hand, winter is coming and it might not be a good tme to sell or even market our house. The person, or family that are supposed to purchase our home are first time home buyers, which may explain why they went out and messed up their credit before the final documents were ready, but shouldn't their realtor have cautioned them not to do that? We were instructed within the first week of purchase and sale agreement to have the septic pumped, NOW, and get your health letter, NOW. We did what we were told, perhaps we should have procrastinated. But how could our realtor have the sales price so far from the appraisal price? There are so many things wrong with this it make me want to pull my hair out.
With the crackdown on sub-prime mortgages & shady lenders, you would think things had been fixed and in order. While the economy is still suffering from record forclosures and I don't even want to talk about short sales, that's another nightmare we endured for 16 weeks while trying to purchase a different home and finally recinded our offer. And it seems that one group was overlooked while the mortgage crisis was in full swing of modification, the real estate agents in this down economy have become vultures, so eager to earn their commission that they seem to forget to follow protocol. I think the whole industry has been overrun with bottom feeders and scavengers. This makes it hard on us hard working, honest people trying to relocate for a better life. We are up a tree and our only ladder may be to back away and hibernate for the winter.
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Comments
Let us start with the sales price: some unscrupulous agents have been known to jack up the price to a seller just to get the listing. However, if your agent is a Realtor, then that is against the Code of Ethics and you can, at the least, complain to the local board of Realtors. However, most likely in this market, there were not enough comparables for the agent to really get a real feel for the price. Though the buyer pays for it, the appraiser works for the lender. Right now, lenders are being extra cautious. The price your property is worth is determined by recent home sales in your area and the condition of your home. If you are in a market that is still declining, that also could explain the difference as well. It is very difficult to come up with an accurate sales price under current market conditions. Agents are not appraisers either. They give you an estimate, based on other home sales in your area in recent months. You also have the right to see the report and find out how the appraiser arrived at the appraised value. You can always get an independent appraisal as well, but that does cost money to you. Since you have accepted the new sales price, you now must wait to see if the buyer can perform (close on the house).
A good seller's agent will keep in touch with the lender or buyer's agent to see how the loan is going. If the buyer, who has acknowledged not keeping up with some payments, cannot perform due to their own actions during the contract period, you may have the right to keep the deposit even though the buyer could not get financing. You need to read the terms of your contract to see what it specifically says. In any case, if it was me personally, I would not sign off on the buyer receiving the deposit back until I found out if it was the buyer's recent actions (during the contract period) that caused the financing denial. In our state, at least, the buyer cannot receive the deposit back without the seller signing off or going through mediation.
If you feel that your agent's actions have been less than professional, you can also complain to the state licensing board. They will review the case to see if the agent is performing to the strict standards that are required. The punishments range from a fine to loss of license. If your agent is not currently taking your calls, call up the broker and find out why. He or she is ultimately responsible for the actions of their agents.
What I would suggest (if the house does not sell) is to look over the next buyer a bit more carefully. It does not mean not selling to a first time home buyer. What it does mean is to carefully weight the purchase price against the downpayment the buyer can make, the financing terms, the longevity of the buyer's employment and also asking for a preapproval letter from the buyer, along with other exceptions to the contract (such as the seller having to sell their home first -- as it appears you have on your own contract with the home you wish to purchase). Remember also that the sellers of that home are going to be as frustrated as you are if you cannot perform on that particular contract. Next time, they are not going to want to sign a contract with buyers who have to first sell their home.
In the next sale, you might also want to consider the pros and cons of keeping the house on the market through the contract period. Again, I am not familiar with the laws of your state, but a "right of recission" can mean that if another buyer comes along who can perform (with cash) or have better terms on the contract, that you can cancel the contract with the first buyer under certain circumstances. You would have to talk to an agent or real estate attorney in your state to see if this is feasible. This would keep your property actively on the market through the contract period. Good luck and do not give up hope. I don't know how long your contract period was for (the time between the iinitial agreement and the date the house is supposed to sell) but it takes time for bad credit to hit a credit report. You may be worrying needlessly.
BTW, I am not a real estate attorney and all legal questions should be directed to a qualified real estate attorney. I also am not a licensed agent in your particular state. Again, laws are different in every state and any comments I have made here are just that. I do not know your personal situation nor am I familiiar with your specific contract and am not qualified to give a professional opinion.
dohn121 says:
4 months ago
I do hope things get better for you, jeenie. Unfortunately as a whole, the housing market is going to get worse (sorry to be the bearer of bad news). Just make your payments and hope that you don't have to relinquish anything else. Thank you for the hub.