My husband and I put an offer in on a short sale at the end of Feb. this year. It only took three weeks to get a counter offer by the bank (not sure who bank was, as it was never disclosed to me by our agent). We signed purchase agreement papers at realtor's office two days later for the counter purchase amount for the home and an extra 5,500 to cover closing costs (which we are paying ourselves). We also fronted earnest money at this time as well. I specifically stated to our agent, at that time, that I hoped that no other lien holders would pop up, like a second mortgage etc., that would slow things down.
The agent stated that the bank already knew who the sellers owed and that we would not have to worry about that happening and also that they could not imagine there being a second mortgage on the house. It took about another week and a half for everyone at the bank to review the paperwork and sign off on it...including the sellers. The file was then sent to our lender (we are preapproved for a VA home loan). Our lender had been working on the file for about a week and then we get a call from our agent saying there are three liens against the property and that they do not know if or when those will get cleared up.
My husband and I were more than a little upset that we were misinformed by our agent, that there should not be any liens against the house, that were not already disclosed to the primary mortgage holder...but yet, we hit the brick wall anyway after the purchase agreement was already made and we thought we were on our way to closing sometime next month (May). Another thing is that one of the liens...is of all things, a second mortgage..which again, the agent said they could not see there being.
We decided to get the advice of a real estate attorney since we feel we have been misinformed....not only about this (which is the major problem)...but we have been misinformed by our agent on other matters as well (although not as pertinent). I asked the attorney, who should have been responsible to uncover these liens prior to any offers being accepted and purchase agreements being made..he said that my husband and I should have been the ones to do a preliminary title search. Of course, this was not something told to us by our agent either....again, they said the bank already knew who the sellers owed. The attorney asked me who held the liens and how much they were for...I told him that it had not been disclosed to us, nor was any mention made of disclosing that information to us, by the agent. He stated that was BS (yes he said the whole word) and told me to call the agent and tell them we want to know those things. He said we had every right to know.
When I spoke to our agent yesterday about that issue, they got somewhat upset that I sought advice from a real estate attorney. I stated again to them..which I have stated several times in the past during this process..that I am a first time home buyer..my husband has purchased homes over the years before we were married..but never a short sale. I explained that I don't like flying blind and was simply trying to gain knowledge.
Since the liens came up...I have called our agent a couple times asking various questions that I'm curious of...apologizing to them for all the questions...and also stating that hopefully we may find another home that we fall in love with, that is not a short sale. To which their reply was in a somewhat sarcastic tone, "yeah, me too". My question is....even though we have not backed out of the deal on the short sale (yet)...is it appropriate to request another realtor, since I feel that we are not receiving the proper information from our current agent and they seem to be getting somewhat irritated with us? We are currently looking at other homes....but I'm not sure if we should request to work with another realtor for any other homes we may want to view or even possibly make an offer on while we wait to see what happens with these liens. I understand that if we find another home, that we want to make an offer on, we will need to withdraw our contract from the short sale home first...I'm just not sure if we need to have our current agent do that..or if a new agent can do so. Sorry for the long story....and thanks for any input.
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There are a couple of issues to consider. One, and this has happened to me as the listing agent, liens can pop up at the last minute. You can do your preliminary title search and not find anything, then when the Title Company is doing their update other stuff can appear, typically things that the seller may have known about and not bothered to tell the listing agent! Liens could be from HOA dues, unpaid utilities, judgements, taxes, child support, any number of things that are not recorded against the property but are against the seller and attach to the property. Second, if the agent is being discouraging about finding a house that's NOT a Short Sale, it could be that in your market, as in mine, over 80% of the homes for sale are Short Sales. Those that are Standard sales often go for a premium price, and if you are trying to stay within a budget, and are asking for the seller's help with closing costs (as many VA buyers do) then you may not have much of a chance on the Standard Sales. Yes, your agent may have been insulted or offended that you ran straight to an attorney instead of trusting him to help you through the transaction. He probably felt that you were blaming him for things that were outside his control. Of course, he could have been a better communicator, but that doesn't mean that he's a bad agent. Some of the best Doctors have horrible bedside manners. I think you need to sit down and have a heart-to-heart with your agent and, if you can come to terms, continue to work with him on finding you another house. Remember, he doesn't get paid for the work he did on this one, and is likely as disappointed as you that it didn't work out.
I would run away from this agent as fast as you can. Could they have made an honest mistake? Yes. But in addition to the mistake, it sounds like they have gotten defensive and uncooperative. You don't owe them anything if you're dissatisfied.
I am sure your agent is at a loss as you are. Your agent trusted that the listing agent knew what they were doing. I blame the listing agent for not knowing of the other liens. I had situations happen when we negotiated all liens and then another lien would appear before we closed the transaction with the buyer.
At this point, find out how much are the other liens and see if they will be negotiated and how long it will take. At the same time, start looking at other homes with your agent. Seriously, I cannot find any fault in his actions other than maybe some issues with communication.
Maureen. Unless you have a signed buyers broker agreement with your current agent then you are free to work with whoever you want to on any other deals. You should review the paper work you have to see what your obligation is if any.
The agent for the seller should have been aware of any other liens and should have disclosed these to your agent. Sounds like someone dropped the ball somewhere.
It does make sense to have an independent lien search done on any properties you place under contract. Just make this a contingency in the contract that you have 10 days to do your own due diligence. A title company can do this for you for a very small fee.