Help: House closing issue....need a internet lawyer! LOL

[Josh2002cc]

Okay, here is the situation in a nut shell.

My girlfriend made an offer on her first house. The final price was $123,000 and buyer pays all closing costs up to $5300. The final closing cost price should be around $5000 or less. At first because of her age the real estate agents thought she was going to do a FHA loan however my girlfriend has the money to do a conventional loan. Long story short, all the paperwork was ran and all the sudden someone at the bank(higher than the loan officer) calls the real estate agent hag up(11 days before closing) and says the buyer can only pay up to 3% of closing costs. That only comes out to be like $3680.00. So the real estate women calls my girlfriend and tells her that she needs to shell out $1300.00 at closing!!!! At this point, the sellers agent and the seller are loving life because they think it is a $1300.00 payday for them.

We did some research and it appears this is common but any seasoned agent should have known this small important piece of information. So, in a nut shell my girlfriends dad calls up the real estate agent(less than 10 days from closing) and tells her that the price of the home needs to be dropped $1300.00 for this deal to continue(Seller concession). He then instructs her to call HIM back as Jessica(my girlfriend) didn't feel comfortable negotiating, she agrees. She did not call him back but sent my girlfriend an email at 6pm tonight saying the seller will not budge and "that wasn't a big deal because she is getting such a "great" deal because the appriasial is $127,000." Big F'in deal right!?!?

So now Jessica's dad is calling the agent to find out why she couldn't call him back but send an email AND why the seller thinks it is okay to not hold up their end of the contract. (Closing costs were part of the written contract) The final decision by my girlfriend was to call their bluff and threaten to walk away or even persue a legal approach for the contract issues. At this point, the seller has an apartment lease(divorce) and I highly doubt she wants to pay over atleast $1,000 to break the lease, lose her deposit, start over selling the house, and make mortgage payments.

Are we in the wrong here or are the two agents trying to push Jessica around? Up until now she has mainly been doing things on her own, not because she doesn't have support but because this is her deal. We only got involved when these three(agent, seller agent, and seller) old hags tried to pull a fast one.

Someone explain this to me!

 

[darkness]

she has the right to walk away from that contract because the seller is changing it. she should get back all her earnest money too. at least thats how it worked when i was buying a house. anything within the contract that changed on the sellers/banks part i could walk away.

 

[Josh2002cc]

she has the right to walk away from that contract because the seller is changing it. she should get back all her earnest money too. at least thats how it worked when i was buying a house. anything within the contract that changed on the sellers/banks part i could walk away.

What is "earnest money" if you don't mind?

 

[Slammed2007Lbz]

Sounds to be like they are trying to pull the wool over her eyes! I would threaten them with the legal thing and im sure they will call back and say well we decided we cant pay the 1,300 we said we were going to in the first place.

 

[Josh2002cc]

Sounds to be like they are trying to pull the wool over her eyes! I would threaten them with the legal thing and im sure they will call back and say well we decided we cant pay the 1,300 we said we were going to in the first place.

Not following you here buddy. They think because the conventional loan only allows the seller to put 3% in that they are no longer on the hook for the full $5300 amount. They think that money just magically turned into their extra profit or christmas gift. In all the reading I have done, it seems a seller concession is the most logical thing to do. If that makes sense.

 

[darkness]

What is "earnest money" if you don't mind?

its more or less a good faith deposit. i guess i shouldnt say get it back, but they shouldnt cash her check. i believe its all handled in the closing. and it can go to either closing costs or the price of the house and i dont think you have a say where it goes. that i dont remember. i think mine went towards the price of the house.

 

[Mike_S]

What is "earnest money" if you don't mind?

Earnest money is a deposit that was put down to take the house off the market so to say while the details were hammered out about the deal. Its a way of saying that you are really going to go through with the deal. If the purchaser breaks off the deal or breaches the contract the seller keeps the money as reimbursement for the time they were not able to accept other offers. If the seller breaks off the deal or breaches the contract that was agreed uppon then you should get that money back.

Edit: Darkness beat me to it...

 

[Smokin LB7]

You dont really have any "legal" action you can take. All you can do is walk away if you dont like the deal anymore or, proceed. When a seller breaks a part of the contract, your recourse is to walk.

Also...never ever ever ever put your faith in a realtor. At the end of the day, they dont make money unless you close on the house. What do you think she has in mind? Getting paid! Dont let her call the shots, YOU guys are calling the shots. I have had to tell plenty of agents off. They have a lot of tactics to "guide" you into buying a house whether or not its a good deal.

If you love the house, just keep going for it. If you can live with out...play their bluff.

 

[Josh2002cc]

You dont really have any "legal" action you can take. All you can do is walk away if you dont like the deal anymore or, proceed. When a seller breaks a part of the contract, your recourse is to walk.

Also...never ever ever ever put your faith in a realtor. At the end of the day, they dont make money unless you close on the house. What do you think she has in mind? Getting paid! Dont let her call the shots, YOU guys are calling the shots. I have had to tell plenty of agents off. They have a lot of tactics to "guide" you into buying a house whether or not its a good deal.

If you love the house, just keep going for it. If you can live with out...play their bluff.

The only one who didn't want to believe her agent was ultimately working for the seller was Jessica. We all told her that from day one, she is now just realizing it. Today should bring new information. Thanks for the replies everyone.

 

[Mike L.]

What does the escrow company say? Shouldn't they be handling this.

 

[MACKIN]

Ok first off how come you don't have a lawyer? Most real Estate deals you have a lawyer not having one in my eyes is a HUGE mistake! A lawyer would handle this. Everyone else has a lawyer to protect there ass! In most cases the agent uses your lawyer,seller hires their own,conflict of interest.

All money (deposits) goes into Escrow no checks are cashed spent or else wise till the closing. In addition you do a walk through the day of the closing and if there is something you don't like you can walk away! As a matter of fact right at the closing you can change your mind and walk! The only one who gets paid would be your lawyer.

You didn't state if you were going conventional or FHA? In each deal there are guidelines in down payment,closing costs and even gifts. Unless she absolutely wants this house then press the issue and the seller should drop the price OR the agent should help on her commission end as she screwed up. So if they want the house sold someone NOT Jessica should budge. So IMO unless she really wants this house and ponies up the $1300 at closing if not,tell them no deal. Its that simple.

Get a lawyer not having one in my eyes is FOOLISH!

 

[GMC_2002_Dmax]

I would as the seller to pay you the $1300 outside of the closing. It says they pay all closing costs up to $5350 not 3%, so to get around it legally you can have the sellers rebate you money for appliances, a roof, a window a paint job in a few rooms, anything that they want to write it for.

or tell the agent for the seller to take it out of his/her commission.

If you don't love the house and are willing to walk away now, call the bluff and then the seller will have to make at least 2-3 more mortgage payments which I am guessing is more than $1,300.

 

[Fingers]

Your Girlfriend agreed to pay up to $5300 in costs. Her bank said the loan requires closing costs be 3%, I assume of the purchase price. Bitch at the banker and or get another bank. 3% of $180,000 is $5400. If it is 3% of the load amount, well that means the loan is for ~$122,000, and the loan does not match the agreement.

Closing costs are the parts of the deal above the actual purchase price of he property. This includes, but is not limited to, taxes, lawyer fees, recording fees,..... Who pays what is negotiable, but your GF has agreed to pay up to $5300, which is again, 3% of the purchase price.

I think someone needs to buy a calculator.

 

[Josh2002cc]

What does the escrow company say? Shouldn't they be handling this.

Good question Mike, I will ask.

Mackin, Great points. I don't know why there hasn't been a lawyer involved yet. I also did not know that one can walk away at any point.

Get this small tid bit of information. The two agents got together with the seller and put in the contract Jessica closed on Jan. 6 but she cannot move in until Jan. 8 at 5pm AND they want to do the walk through on Jan. 5 at 9am. I have never heard of something so screwed up. Basically, this women gets a free 3 days rent from my girlfriend and Jessica is required to put insurance and utlities on the home while this woman "moves" her stuff out. That is also going to be addressed with todays phone call.

 

[Josh2002cc]

Your Girlfriend agreed to pay up to $5300 in costs. Her bank said the loan requires closing costs be 3%, I assume of the purchase price. Bitch at the banker and or get another bank. 3% of $180,000 is $5400. If it is 3% of the load amount, well that means the loan is for ~$122,000, and the loan does not match the agreement.

Closing costs are the parts of the deal above the actual purchase price of he property. This includes, but is not limited to, taxes, lawyer fees, recording fees,..... Who pays what is negotiable, but your GF has agreed to pay up to $5300, which is again, 3% of the purchase price.

I think someone needs to buy a calculator.

Sorry Fingers, the seller(not my girlfriend Jessica) agreed to pay the closing costs. I think you have it backwards.... Also, the home is $123,000 before her down payment. 3% of 123,000 is $3690 which is under the $5300 the seller agreed to pay up to. The bank is saying at the moment closing costs will be no more than $5080.00 or so which is also lower than the agreed $5300.00.

 

[MACKIN]

Good question Mike, I will ask.

Mackin, Great points. I don't know why there hasn't been a lawyer involved yet. I also did not know that one can walk away at any point.

Get this small tid bit of information. The two agents got together with the seller and put in the contract Jessica closed on Jan. 6 but she cannot move in until Jan. 8 at 5pm AND they want to do the walk through on Jan. 5 at 9am. I have never heard of something so screwed up. Basically, this women gets a free 3 days rent from my girlfriend and Jessica is required to put insurance and utlities on the home while this woman "moves" her stuff out. That is also going to be addressed with todays phone call.

Man this is screwed up! The seller should be out BEFORE the closing. Look she could pull a fast one a slip and fall and sue your girlfriend! You know that right? Trust NO ONE today.

So I wouldn't take possession until she was out.If you did then she'd have to sign a waiver holding her harmless and charge a storage fee of $1300 dollars!

Get a lawyer to handle this deal it will be worth every penny spent. Could very well be that she is using the Agents lawyer,myself I'd want one working on my behalf! Let the agent piggy back on my lawyer not reverse.

I know when I bought my house it was vacant ,they would NOT allow me to move anything in until the closing. Even tho it was a done deal

 

[Fingers]

Get this small tid bit of information. The two agents got together with the seller and put in the contract Jessica closed on Jan. 6 but she cannot move in until Jan. 8 at 5pm AND they want to do the walk through on Jan. 5 at 9am. I have never heard of something so screwed up. Basically, this women gets a free 3 days rent from my girlfriend and Jessica is required to put insurance and utlities on the home while this woman "moves" her stuff out. That is also going to be addressed with todays phone call.

Not uncommon for the closing date and the move-in/move-outs to be mismatched. In your case, the seller must provide proof of insurance, payable to your GF, for the price of the house plus costs. Compensation (rent) for the time they reside in the house is not uncommon, but not worth the hassle for the 3 days you are talking about. But, I would hold in escrow a cleaning fee in case they don't remove everything they say they will. Like the moldy couch or fish tank with dead fish.

I ALWAYS walk down the property on my way to the closing. I want to be sure what I am buying is still there in one piece.

 

[jmaz268]

Good question Mike, I will ask.

Mackin, Great points. I don't know why there hasn't been a lawyer involved yet. I also did not know that one can walk away at any point.

Get this small tid bit of information. The two agents got together with the seller and put in the contract Jessica closed on Jan. 6 but she cannot move in until Jan. 8 at 5pm AND they want to do the walk through on Jan. 5 at 9am. I have never heard of something so screwed up. Basically, this women gets a free 3 days rent from my girlfriend and Jessica is required to put insurance and utlities on the home while this woman "moves" her stuff out. That is also going to be addressed with todays phone call.

That would be a cold day in hell before I allowed that to happen....When you close on the house...her shit needs to be out before signing the papers, unless you come to an agreement with the seller. But having items left behind, and them living there is 2 seperate things, what happens if the bitch burns it to the ground?

Was this a short sale or money delinquency related sale?

I did the same thing with the last owner of my house, it was winter with lots of snow on the ground and there was a few things left in the shed out of the way, until the snow cleared so he wouldn't tear up the ground.

But otherwise, seems like ALOT of Shady shit going on here.....I would walk, and find a new realitor. She would have had to sign an agreement when she made the offer on the house. The buyer says I'll pay this with these stipulations, ie the 3% of selling cost, furniture, appliances....

The part I'm not sure on is, if you have a legal leg to stand on showing they broke the contract by shortchanging you. I would think you could sue for something like wasting your time lol....but I would contact a real estate lawyer not associated with your realitor to get the real answer.

 

[dmaxdaddy]

Okay, here is the situation in a nut shell.

My girlfriend made an offer on her first house. The final price was $123,000 and buyer pays all closing costs up to $5300. The final closing cost price should be around $5000 or less. At first because of her age the real estate agents thought she was going to do a FHA loan however my girlfriend has the money to do a conventional loan. Long story short, all the paperwork was ran and all the sudden someone at the bank(higher than the loan officer) calls the real estate agent hag up(11 days before closing) and says the buyer can only pay up to 3% of closing costs. That only comes out to be like $3680.00. So the real estate women calls my girlfriend and tells her that she needs to shell out $1300.00 at closing!!!! At this point, the sellers agent and the seller are loving life because they think it is a $1300.00 payday for them.

We did some research and it appears this is common but any seasoned agent should have known this small important piece of information. So, in a nut shell my girlfriends dad calls up the real estate agent(less than 10 days from closing) and tells her that the price of the home needs to be dropped $1300.00 for this deal to continue(Seller concession). He then instructs her to call HIM back as Jessica(my girlfriend) didn't feel comfortable negotiating, she agrees. She did not call him back but sent my girlfriend an email at 6pm tonight saying the seller will not budge and "that wasn't a big deal because she is getting such a "great" deal because the appriasial is $127,000." Big F'in deal right!?!?

So now Jessica's dad is calling the agent to find out why she couldn't call him back but send an email AND why the seller thinks it is okay to not hold up their end of the contract. (Closing costs were part of the written contract) The final decision by my girlfriend was to call their bluff and threaten to walk away or even persue a legal approach for the contract issues. At this point, the seller has an apartment lease(divorce) and I highly doubt she wants to pay over atleast $1,000 to break the lease, lose her deposit, start over selling the house, and make mortgage payments.

Are we in the wrong here or are the two agents trying to push Jessica around? Up until now she has mainly been doing things on her own, not because she doesn't have support but because this is her deal. We only got involved when these three(agent, seller agent, and seller) old hags tried to pull a fast one.

Someone explain this to me!

This is one of many tactics to maximize the profit on the sale. The fact that this is Jessica's first time and she wanted to do it alone might be why you are having problems. They are counting on the fact that your emotion will override logic (and her lack of experience in this situation!). Although it may be disappointing if you want the original deal, you have to be able to walk away if you don't get it. Not sure where you live but this is one of the worst housing markets ever! I seriously doubt the they will walk away from a qualified buyer who is ready to sign at the numbers they agreed to. If they do, there is definately more inventory out there to choose from. You just have to look. They are taking a shot! You have to be prepared to call their bluff the whole way. Just my .02. Good luck!

 

[Josh2002cc]

Well everyone, it has been decided that we will not contact the agents until a lawyer has been aquired. Jessica's current neighbor works for some "big shot" real estate attorney and they are getting him involved. They are also going to try and put a stop to her living there for the 3 days after closing.

Basically in a nut shell what happened I guess is pretty common from my internet research. The agents used a big number like "up to $5300 in closing costs" knowing full well that the laws only allow a 3% seller contribution to closing costs(in this case 3% of 123,00 is $3690). Basically, a play on numbers. The good faith estimate says the closing costs will be about $4800 so they lead you to believe you are as the buyer not going to pay anything out of pocket for closing costs. Then, last minute they spring it on you that the conventional loan only allows the 3% and you now have to pony up the rest.

This whole thing pisses me off and it isn't even my money. Jessica is only asking for what they agreed too, nothing more.