Bait and Switch?
What should have started off as a perfect transaction ended up with me questioning the buyer, the buyer agent and everything else …..
I listed a lovely “starter” home last summer, an offer came in pretty quickly with a good price and the buyer was pre-qualified for a conventional loan. I sat with seller and we went over: price terms and conditions and she countered the buyer with a new price only since the terms and conditions were acceptable. The buyer agreed to the counter and we entered into a contract.
Inspections were held pretty quickly. We had some items the buyer was looking to be repaired. My seller was thoughtful about the repairs being asked of her and even though money was very tight, she agreed to some of the repairs which included replacing one window of the several that were requested of her to repair due to the exterior wood being cracked or in otherwise older condition. Once the repair agreement was accepted and signed by both parties a week goes by and I learn about the bait and switch.
The buyer agent called and said that his buyer, while applying for his mortgage, learned it would be better if he went FHA, and would my seller sign an addendum that buyer was going FHA? My seller didn’t have any problem with the change and signed the paperwork. Paperwork made it back the buyer agent later that day. Next morning, buyer agent emails me the appraisal report with pictures of exterior of the home and note stating that “As I am sure you are aware, any peeling or chipped paint on exterior must be scraped and repainted by seller before appraisal will pass an FHA inspection”. WHAT???? Wait! I am listing agent, when was there an appraisal? We negotiated those windows already during inspections a week ago? What just happened???
That was the first reaction…I then calmed down and realized that yes, if we lost this buyer and put the house back on the market, we were likely to have another buyer come in with FHA conditions too. This price point was a “starter home” price and FHA is attractive for buyers just starting out. I had to keep this deal together and advised my client to find a way to scrape and paint parts of the exterior as soon as she could.
But that still leaves me with the sketchy bait and switch…I called the other Realtor and asked when the appraiser went in and why I didn’t get the call…oh they called me, he said and I took them in.... since I was already there he said, I didn’t think you had to be bothered. Please, next time, bother me!
I had a choice to make at that point, give him a piece of my mind about how this whole this situation is suspect or remain professional…I remained professional. I told him the appraisal was my job to attend and I requested future calls from an appraiser come to me. I then told him that it would have been appropriate to inform me at time of inspection negotiation, that peeling and chipped paint was discovered by appraiser and would also need to be repaired by seller in addition to the other inspection items. Further, I explained that the timing of the FHA switch was unfortunate and my seller is very unhappy but would proceed.
As you can see, we were not really in a position to do anything else. Seller could not walk away and we were so close to the closing date by that point we had to continue. Sure, she could have renegotiated the other inspection items, but the buyer could have walked away. This was a clear case of the buyer agent not being totally fair to all parties.