Getting Nervous -- Long - Posted by Connie SoCA

Posted by wayne on August 04, 2001 at 04:54:43:

: He is completely correct. My fiance and I purchased our home via fha about 9 months ago, we had to sign agreements stating (and the seller/builder did as well) that there were no side agreements with the home. This is itself will negate any side contracts that you have with the buyer and more than likely bring you into more hot water than you can handle with fha.

I did have a side agreement with my developer, I learned of the statement I had to sign before the closing, and changed that agreement with the seller to him providing landscaping for 2 months at a price of 1k. This in itself was just a contract between me and him, verbally, private and was not contingent on the home purchase. (even though it was)—darn fha required him to purchase a 10 yr warranty on the home.

So he had his people over to pick up a pop can one month that I left in the driveway, that cost me 500 bucks…and the other month he had someone pull a couple of weeds…that cost me another 500 bucks…

I swear, landscaping in the portland area is expensive as hell, and they never do a very good job.

Getting Nervous – Long - Posted by Connie SoCA

Posted by Connie SoCA on August 01, 2001 at 22:58:44:

I have had a house up for sale for too long. I am going to start losing money in a couple of months. However, I have a buyer who is going into escrow.

This buyer showed up, at first, with a signed purchase agreement. Her price was too low for me, so we negotiated and I got what I wanted.

She is on a tight budget and keeps balking at putting out money. She is getting help from the City with the down payment. She is also getting an FHA loan. She seems serious about buying and wants the house.

I am still getting calls from my ads. I am taking backup offers, but when they find out the house is in escrow, they say, “thanks!”

Here’s the nervous part: After we signed the initial counter offer that I gave her (through her Realtor!), she asked if she could move in right away. I had offered that as a lease/purchase up front, but she said no. Then the next day she wanted to move in. I gave her lease contracts, told her she needed to give me earnest money as a deposit. Her Realtor agreed that this was what should happen.

THEN today she saw her mortgage person. She has to come up with more $$ (about $1700) estimated closing. They (she and her Realtor) wanted me to come down in price $2000 to cover that since I had talked him down to 2% commission, and I said no. I could see this becoming high-maintenance until closing! So I asked to take a note back for $2000 at 10% for 3 years. They agreed. I wrote that into the lease as the earnest money. However, we have to do this outside the FHA. I try to keep one-up on them, but they are starting to get funny about it. No money has been put on the table. She was supposed to bring me $500 cash today as part of rent so she could get a receipt to show some government agency. She didn’t have a cashier’s check. Suddenly it’s OK to give me the rent on Monday, when she is moving in. She was going to come to my house last night with cash. But then we decided to meet today. This isn’t going well, is it?

I decided to buy this house in the first place to get the first deal under my belt. I didn’t want to get stuck in the wholesaling side and find I didn’t know what to do next. I bought a HUD repo at a good price, fixed it up quickly, and put it on the market. It’s been 4 months!

So, now I’m nervous. Although my loan has a high interest rate because they knew I wanted to sell soon after, am I going to run into SEASONING issues with FHA? Am I stuck with a house that I have to rent out at a loss (high interest means high monthly)? Is my buyer going to renege? I have given her this form and that form.

I think I will start dealing just with her Realtor. He seemed easy at first, but they are friends. They make a funny team. He is older, probably retired, white, and has had a heart attack recently and needs a new hip. He can’t get around. She is Cambodian, has a thick accent, has 6 kids and a fiance (who is probably Hispanic/Italian). I don’t know where her kids are, since I have only seen 2 of them. My house is SMALL. I don’t know how or where they will actually fit in the rooms.

So, I am nervous. I got blind-sided today. We met at the house and the Realtor couldn’t get out of the car. It was hot, so we are negotiating in his dirty, hot car, about the $2000.

I want to sell this house. This deal may go south. The house is getting tented Friday. She moves in on Monday. She has to get out of her other place. So, what would you do? I seem to have more problems than solutions. Any suggestions would be appreciated.

Re: Getting Nervous – Long - Posted by Alex Gurevich, TX

Posted by Alex Gurevich, TX on August 02, 2001 at 16:19:16:

I’m with Jim on this. Do NOT let that buyer take possession, unless you can get a substantial NON-refundable downpayment. It doesn’t look like you can, since they are working with the govt’ agency.

It’s very easy to get someone in the house and hard to get them out.

There’s a gazillion things that could go wrong with the loan and you could easily get stuck with the tenant in the house and no sale. That’ll be your worst nightmare.

I once had an offer on a house I was selling for $25,000 down with owner financing on CFD. An easy closing, right. Except there was a 2 days contingency for their own house to close within 2 days. That’s where the $25,000 downpayment was coming from. Their buyer’s loan was approved and everything was ready to close.

My buyers requested the permission to move in now, before our and their closing (lease it for a couple of days.) Having learned before what a pain it is to be stuck with non-performing buyer in the house I requested a 5% cash non-refundable. They didn’t have it and I refused to let them move in and offered to let them move their furniture only in the garage.

They were insulted and I lost the Contact. Their house didn’t close for the next 4 months (I was checking the MLS -it was still for sale.)

Re: Getting Nervous – Long - Posted by Judy

Posted by Judy on August 02, 2001 at 10:21:58:

Was this buyer preapproved for a loan? If she is not I would not let her move in until at least you had this from lender. It doesnt take long to get this. I had the same situation serveral years ago and let the buyer move in. About a week before closing she decided the house was to expensive and after living there discovered things she really didnt like. With the help of my lawyer and the loan officer she was talked into going thru with the sale but it was tense. You are taking a chance she wont go thru with sale or leave the property once she is in. You may end up with a tenant you have to evict. As I said my situation worked out but it is a gamble. Sounds like you have a lot of other interest in the house which may work out better.

Re: Getting Nervous – Long - Posted by JPiper

Posted by JPiper on August 02, 2001 at 10:04:53:


You’re way too attached to this buyer…to the point where you’re making an illegal move regarding the note, and you’re allowing them to occupy prior to obtaining the loan. You think it’s slow now, wait until they’re already in the house.

I’d back away from this deal…let them come to you. DO NOT allow them to occupy. If they don’t start performing, them blow them out of there. Take some of the other calls you’re getting.

Remember: there’s always another bus coming down the street.


Re: Getting Nervous – Long - Posted by Tom – IN

Posted by Tom – IN on August 02, 2001 at 01:55:35:

Be real careful about that $2000 note. If you’re hiding it from the FHA, this probably constitutes bank fraud, which is like 12 to 18 years in Federal prison.

Re: Getting Nervous - Posted by Mark - IL

Posted by Mark - IL on August 02, 2001 at 24:04:47:

Well, here’s my 2 cents. knowing full well that this is your first deal you are doing great in the waiting game.

Now for your situation. Money speaks if they keep giving you the run around I would set a dead line of 48 hours for them to come through the deal. Sounds like she may have a few houses she is doing this too and is trying to get the best deal for her self.

There are many red flags with this deal and from just the sounds of it I would give them 48 hours to except the offer come up with earnest money aggrement like 500 bucks and close within 15 days. If they cannot aggree to this I would look at a different buyer. I would tell agent only. Let them make the move if she really wants it, she will play straight with you, other wise you have avoided many future headaches with this person. Also tell them that you have other buyers that are interested. I would do this over the phone and to the real estate agent. Let him do the work.

Sorry I am sure other people may give you creative ways to try to work this deal out. But from my experience, if a deal starts to stink and it’s not taken care of you may end up with a upset tummy.

Just stick to your game plan and find a good buyer.

Good luck

Mark - IL