Replies to This Discussion

Permalink Reply by Sherrilee Denton on July 16, 2010 at 1:13pm

I'm sure you have a good agent, but when reading this I'm left wondering where is your agent in all of this? I'm surprised an agent would even consider anything to do with the HUD that is not on the up and up. It's not legal if it's not on the HUD. Agents can lose their license and livelihoods over issues like this . . . its called fraud.

An option, is to show it on the HUD as "POC" Paid outside of Closing, but even then, your lender is going to want any money you may be contributing and it's unlikely they will agree. Has your agent offered to make a contribution to the buyer? He's involved in a dual agency and is making all the commission for both sides. Maybe he'll consider a commission contribution for the buyer for the $1,000 to get the deal done.

Why is the buyer demanding the $5K? Your ad offered the closing cost contribution of $5K based on a full price offer of the approved short sale price of $59K. That is not what the buyer offered and therefore he should not expect the $5K. Don't advertise what can't be delivered. Also, remember this buyer and any other buyer has the ability to cancel the contract during the inspection period so you run this risk with anyone. You may have to realize this buyer is gone and continue to market your home to bring in another acceptable contract. If you do, you may want to consider the risk to you of allowing your list agent to become a dual agent again. Did your agent explain to you the ramifications of him doing a dual agency? Maybe he did . . . and that's why you have to seek advice and counsel elsewhere. Ask.

Permalink Reply by Frank Mir on July 16, 2010 at 2:27pm

Sherrilee,

Thanks for the reply. I have my doubts about my agent but then again i am a pisser to work with. I have asked about realtor contribution to the buyer but it doesn't come close to the $5000. Now that the shortsale is approved for $55,000 he wants to only pay $50,000. I guess we could put in an addendum and chage the contract price to $50,000 and have the $5,000 cash contribution come from me?????

Permalink Reply by Sherrilee Denton on July 16, 2010 at 2:54pm

If you have ANY money the lender will want it. If they see you have money, they will want it. The buyer is paying cash and is not incurring all the traditional closings costs involved if it was financed. I'm assuming the $5K was offered toward buyer's closing costs on a full price offer, right. Your buyer did not offer full price, is not financing the purchase and is not incurring $5K in closing costs. Why should he expect any other money? The bank already agreed to a reduced purchase price. What is your realtor saying or suggesting? Anything?


Frank Mir said:

Sherrilee,
Thanks for the reply. I have my doubts about my agent but then again i am a pisser to work with. I have asked about realtor contribution to the buyer but it doesn't come close to the $5000. Now that the shortsale is approved for $55,000 he wants to only pay $50,000. I guess we could put in an addendum and chage the contract price to $50,000 and have the $5,000 cash contribution come from me?????

.

Permalink Reply by Frank Mir on July 16, 2010 at 4:46pm

My realtor called me 1 week after the buyer walked saying he will close the deal for $5,000. I should have told him i wanted out of my exclusive listing agreement at that point. We decided to try and offer him 3,000 and he wouldn't go for it. So finally i told the realtor to go ahead and give him the 5. The Realtor proceeded to right up an addendum to the original contract to change the purchase price to $50,000 but i told him no because the bank will never approve it and i didn't want the bank to know about it. After a lot of prayer and not having peace about it i am having second thoughts. This is were i need to do this so it's legit. Today i told them both that i am not doing the deal unless its on the HUD. I am open to some suggestions but i think it's pretty clear cut that any transactions outside the HUD like you said are off limits. We will already have a deficency with this short sale since BOA rarely gives releases. I am willing to take my chance with that but not a side deal.

Permalink Reply by Sherrilee Denton on July 16, 2010 at 5:28pm

Sounds like your on the right track. It must be on the HUD even if it's POC (paid outside of closing). As far as the deficiency language check for more information on the thread here http://www.shortsalesuperstars.com/group/bankofamericashortsales/fo... Lastly, reconsider allowing your short sale list agent to be a dual agent. Don't give up. Market the home and get a new buyer and try again, but this time reconsider offering any money upfront for closing costs or otherwise . . . you never know what the bank will or will not agree to until the deal is done. Each short sale is different as is each property.

Your realtor is there to guide and counsel you, but the final decision is up to you. If your realtor ends up being a dual agent he can no longer counsel or offer suggestions on what to do. On this last deal you brought the buyer to the agents attention so obviously you were willing for your agent to take on the dual agency. Hopefully he explained what this entailed and how his roll as your list agent changed. If not, ask your agent to explain how your relationship changes when he is representing both parties to the contract and see if that is acceptable to you. Good Luck and Hang in There.

Frank Mir said:

My realtor called me 1 week after the buyer walked saying he will close the deal for $5,000. I should have told him i wanted out of my exclusive listing agreement at that point. We decided to try and offer him 3,000 and he wouldn't go for it. So finally i told the realtor to go ahead and give him the 5. The Realtor proceeded to right up an addendum to the original contract to change the purchase price to $50,000 but i told him no because the bank will never approve it and i didn't want the bank to know about it. After a lot of prayer and not having peace about it i am having second thoughts. This is were i need to do this so it's legit. Today i told them both that i am not doing the deal unless its on the HUD. I am open to some suggestions but i think it's pretty clear cut that any transactions outside the HUD like you said are off limits. We will already have a deficency with this short sale since BOA rarely gives releases. I am willing to take my chance with that but not a side deal.

Permalink Reply by Bob Seliski on July 17, 2010 at 3:52am

I have had luck in getting the deficiency removed. Here is how it went:
1. BOA when asked, said the mortgage insurance company, AIG was the one who was requiring the language.
2. I asked for the AIG contact info. Called them and found out that in fact they approved our sale with NO strings attached.
3. Went back to BOA and confronted them with this and gave them the contact info and the person at AIG I spoke with.
4. After two weeks of not giving up and accepting their stock answers, it was escalated to higher dept.
5. They finally acknowledged there was no requirement from AIG and we got the approval letter with the language removed.
The lesson to be learned:
The negotiators are the gatekeepers. When you do not get the answers you need, you must press on beyond them BUT do so with kindness. You attack the negotiator, you're dead in the water.

Permalink Reply by Barbara J. Rice on July 17, 2010 at 7:04am

I would contact the bank and TELL them what is happening. You are 100% correct that you do not want to do a "side" deal. You could be sued for fraud. Ask your Realtor to email the negotiator and explain the situation AND provide a suggested solution that you will commit to. The bank may not go for it but at least they'll see that you were open and honest and perhaps give you more time to find a new buyer. Good luck!

Permalink Reply by joe beauchamp on July 17, 2010 at 8:18am

I'm surprised that everyone is only giving you the thinking straight along the way of the HUD. You may buy personal items or sell them and that has NOTHING to do with the sale of the house, ergo, does not belong on the HUD. Sellers have sold furniture to buyers to get needed cash. That is not a house, that legally has nothing to do with the house and no bank has the right to tell you that you cannot buy or sell your personal belongs - in the U.S. So, if the buyer has $5K of something that you want, you can escrow that outside of the closing and it is all legit and totally accepted practice despite what some people are suggesting.

On the other hand, I don't like people like your buyer - just like dealing with more 2nd lien holders - dirty tricks. But, if people were put in jail for being unethical, immoral and not nice, well, I know where I'd be visiting an awful lot of BofA people... Oh, and Fannie Mae people... .

If your buyer could legitimately do whatever it was he did, then you don't have real recourse. In NJ, the realtors are forced to use a pinhead 3 day rule imposed by lawyers that anyone can get out of the contract IF they EMPLOY a lawyer to get them out within that 3 days. On top of that, if the contract is written by a lawyer instead of one used by a realtor, there is no 3 day rule. Let me see, which one do I really need 3 days to determine if I'm being screwed, the standard one from teh realtor or the ad hoc one thrown together by some sweet lawyer..hmmmm.. Nice law. Anyway, buyers would use that to shop for better deals in those three days (when things were going hot and heavy) then have their lawyer so "NO" (they don't need a reason) to get out of the contract while you are stuck thinking you have a buyer. Moral? No. Ethical? No. Legal. Well, of course..

Permalink Reply by Jerry A. Ringo on July 18, 2010 at 3:15am

Sherrilee Denton said:

I'm sure you have a good agent, but when reading this I'm left wondering where is your agent in all of this? I'm surprised an agent would even consider anything to do with the HUD that is not on the up and up. It's not legal if it's not on the HUD. Agents can lose their license and livelihoods over issues like this . . . its called fraud.

Thank you, Ms. Denton!

Permalink Reply by Bryant Tutas on July 20, 2010 at 12:14am

Joe, Selling/purchasing personal property is fine as long as it is a legit purchase. Just writing up a bill of sale and purchasing something at an inflated price to pass money from one party to another outside of closing is fraud. Of course in this case it would be a distressed seller trying to come up with $5,000 cash to buy something from the buyer. It's extortion. Sounds to me like this particular buyer is just wasting everybody's time.

joe beauchamp said:

I'm surprised that everyone is only giving you the thinking straight along the way of the HUD. You may buy personal items or sell them and that has NOTHING to do with the sale of the house, ergo, does not belong on the HUD. Sellers have sold furniture to buyers to get needed cash. That is not a house, that legally has nothing to do with the house and no bank has the right to tell you that you cannot buy or sell your personal belongs - in the U.S. So, if the buyer has $5K of something that you want, you can escrow that outside of the closing and it is all legit and totally accepted practice despite what some people are suggesting.

On the other hand, I don't like people like your buyer - just like dealing with more 2nd lien holders - dirty tricks. But, if people were put in jail for being unethical, immoral and not nice, well, I know where I'd be visiting an awful lot of BofA people... Oh, and Fannie Mae people... .

If your buyer could legitimately do whatever it was he did, then you don't have real recourse. In NJ, the realtors are forced to use a pinhead 3 day rule imposed by lawyers that anyone can get out of the contract IF they EMPLOY a lawyer to get them out within that 3 days. On top of that, if the contract is written by a lawyer instead of one used by a realtor, there is no 3 day rule. Let me see, which one do I really need 3 days to determine if I'm being screwed, the standard one from teh realtor or the ad hoc one thrown together by some sweet lawyer..hmmmm.. Nice law. Anyway, buyers would use that to shop for better deals in those three days (when things were going hot and heavy) then have their lawyer so "NO" (they don't need a reason) to get out of the contract while you are stuck thinking you have a buyer. Moral? No. Ethical? No. Legal. Well, of course..

Permalink Reply by Stephanie Lim on July 20, 2010 at 4:48am

If it's not disclosed on the HUD I wouldn't go near it.

Permalink Reply by joe beauchamp on July 20, 2010 at 4:12pm

It is not something I've had to mess with, but I think one needs to be aware of what one calls fraud. Are you really saying that anything happening outside of a real estate transaction has to be considered part of that transaction and that if YOU don't like the numbers it must be fraud? Kinda trampling on rights here, no? Because he is a seller/buyer, he isn't allowed to give away his old bed or buy gold coins on ebay at $100 when they are really worth $1? I think you just killed the free entreprise system and U.S. citizen property rights at the same time.. No, I don't think you give up your rights just because you are buying or selling a house. I deleted a whole lot more that I put here - really unnecessary...and probably very boring... ;-)

Bryant Tutas said:

Joe, Selling/purchasing personal property is fine as long as it is a legit purchase. Just writing up a bill of sale and purchasing something at an inflated price to pass money from one party to another outside of closing is fraud. Of course in this case it would be a distressed seller trying to come up with $5,000 cash to buy something from the buyer. It's extortion. Sounds to me like this particular buyer is just wasting everybody's time.

joe beauchamp said:

I'm surprised that everyone is only giving you the thinking straight along the way of the HUD. You may buy personal items or sell them and that has NOTHING to do with the sale of the house, ergo, does not belong on the HUD. Sellers have sold furniture to buyers to get needed cash. That is not a house, that legally has nothing to do with the house and no bank has the right to tell you that you cannot buy or sell your personal belongs - in the U.S. So, if the buyer has $5K of something that you want, you can escrow that outside of the closing and it is all legit and totally accepted practice despite what some people are suggesting.

On the other hand, I don't like people like your buyer - just like dealing with more 2nd lien holders - dirty tricks. But, if people were put in jail for being unethical, immoral and not nice, well, I know where I'd be visiting an awful lot of BofA people... Oh, and Fannie Mae people... .

If your buyer could legitimately do whatever it was he did, then you don't have real recourse. In NJ, the realtors are forced to use a pinhead 3 day rule imposed by lawyers that anyone can get out of the contract IF they EMPLOY a lawyer to get them out within that 3 days. On top of that, if the contract is written by a lawyer instead of one used by a realtor, there is no 3 day rule. Let me see, which one do I really need 3 days to determine if I'm being screwed, the standard one from teh realtor or the ad hoc one thrown together by some sweet lawyer..hmmmm.. Nice law. Anyway, buyers would use that to shop for better deals in those three days (when things were going hot and heavy) then have their lawyer so "NO" (they don't need a reason) to get out of the contract while you are stuck thinking you have a buyer. Moral? No. Ethical? No. Legal. Well, of course..

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