Atlanta Buckhead Midtown
Non-Professionals Cause Industry-Wide Harm
What a wonderful opportunity when a previous Client returns years later to ask for help to buy a new home!
Back in 2013, I sold her the house where she was living now. We worked well together for that purchase and during the years that followed. From time to time, she called with real estate questions and for house repair needs. always glad to support my wonderful Clients.
Circumstances have changed for her as they do for all of us over time. Now about to marry, she wants a larger space where they can live comfortably and then raise the family they dream of having.
When she told me she had signed an Offer for her current house already, that was fine with me since I work as a Buyer's Broker.
She worked with our preferred Lender and all Mortgage details came together easily. Purchase money would be ready and the Down-Payment would come from the money left over after her current Mortgage was paid at Closing. All set!
Spring 2021 equals a very limited pool of available homes. We look and look and look some more. Too bad one cannot take the Kitchen from one home and the Master Bath from another and put them all together into the home on the prettiest lot! Yet we are patient and committed to finding the right place for them to live. So we continue to search.
One day, we find the perfect house and make an Offer.
In order to write the Purchase and Sale Agreement, focus on the Sales Contract dates came into play. She said the Buyer had told her they could Close anytime with week's notice and that for another ten days after Closing, they could remain in the house to pack and move out.
The Sellers accepted the Contingency about her house sale. Sellers wanted to Close four weeks later anyway since their new house wouldn't be available yet. In fact, they wanted an additonal four weeks to stay after the Closing. Lots of back and forth. Eventually, we arranged the dates to suit everyone's schedules.
Now to firm up the first house sale Closing. Calls to the Buyer proceed satisfactorily until requesting a firm Closing date be set. Unfortunately, complications quickly came to the forefront.
Why did complications appear? Now you will understand the Post Title:
Non-Professionals Cause Industry Wide Harm
It turned out that the Offer for her current home was a one-page contract totally slanted in favor of the Buyer. She had discussed the situation with her husband-to-be when she received the Offer. They both agreed that it seemed like a wonderful opportunity to sell. Imagine, the Offer was for 20% more that they thought she'd get and no commissions to pay! Their excitement at receiving a high-priced unsolicited offer for her home overwhelmed their commom sense and she signed.
The Offer came from an LLC, not responsible REALTORS, and
- - allowed the Buyers 120 days of control.
- - only $1000.00 EM to be held by Buyers' lawyer.
- - stated there could be a "reasonable" administration fee.
- - rights to enter the home at any time they wished.
- - rights to bring anyone they wanted to see the home.
- - PLUS the right to list the home for sale in any MLS they chose.
If you have been a REALTOR for more than a few minutes, you know these one-pagers for what they are: an unscrupulous gambit to tie up a home until the people find someone else to take over the obligation.
As soon as I saw this document, I sent it to the Closing Attorney. I am not a lawyer. I wanted him to be aware of what was going on.
However, the Client insisted it was a good-faith offer. I was prepared to be wrong. And perhaps I would be wrong because they did set a Closing Date without any of the usual tricks.
What usual tricks? Lowering the Offer and Postponing Closing.
After the Inspection, they can claim to have found unknown defects and lower the Offer price. The Seller is caught up in the rhythm then and often agrees to a lower price. Then, if they haven't found the person to take over their Offer, they continually postpone the Closing Date.
In our situation, no request for price reduction followed after the date set for the Inspection. Maybe it wasn't a fraud?
Five days before the scheduled Closing, Clients completed their Move-Out. They put everything into Storage for eight weeks and went to stay with relatives. The Buyers were aware of the Move-Out.
On Monday, the Buyers' lawyer called to say Title was ready. On Tuesday, the Buyers' lawyer called to say the Closing was set for Thursday afternoon. Wednesday morning, Thursday's Closing time was confirmed.
Was this going to be the exception that proved the rule?
No, sad to say, it wasn't. At 1:30pm on Thursday, the Buyers called to say the 3:00pm Closing was cancelled. They had to reconsider the price. When asked they said at least 10% less but they couldn't say for sure yet. No commitment.
Friday ended the Contingency Period. I called the Listing Agent and explained that their Buyer wouldn't be Closing that week. She was very gracious about the situation. I prepared a Unilateral Termination of Agreement and Request for Return of Earnest Money form. Our Client signed and the Sellers signed. At least the Earnest Money is safely back to our Client.
Now the Real Estate Attorney will send a Termination of the Offer to those (xxx) people. Once my Client is free of that one-sided obligation, a Broker friend of mine who does Listings has agreed to get the house on the Market as quickly as possible. Already been by to start planning.
So totally disappointing! So much time expended!
As soon as the Client is freed from that paper, we will begin to look for homes again. I call my company "ODAT" for One Day At a Time". Having that name reminds me that every single day has some lesson to offer.
Our job is to recognize the lesson when it is in front of us. I am sure this couple has learned from this huge disappointment.
If you read this far - thanks! I bet every professional reading this has encountered these slipshod, sneaky people over the years. Take care.