Broker from Hell and my first deal! (long) - Posted by Nicole_AZ
Posted by Nicole_AZ on February 16, 2000 at 17:57:25:
Ok, let me start by saying that I accept there are good and bad types for every profession out there. I just happened to have run across the worst “professional” in real estate imaginable. At least that is my opinion.
Second, let me say that this was the first property I purchased for investment purposes and I made a lot of mistakes that I have learned some valuable lessons from.
This story will be long enough, so in the interest of time and space, I have left out a few of the other issues. On with the story.
I ran across an add in the paper back in late October/early Nov. The property was advertised as 20K below market value so I decided to call on it. I was given the price of $179,900 so I decided to check it out. The house was immaculate. There were no repairs necessary at all.
I had the broker run some comps for me and my estimate came in that it was much closer to 30K below market for the area. I contacted my investment partner to take a look. While we were there, the broker then informed me that the property would be listed in the MLS the next day for 209K and that it was a steal at 189K. I said, “Wait a minute, you told me 179K, I even wrote that down.” She said she would never have said that and proceeded to announce to all present that I had screwed up and the price was actually 189K. First lesson; When the broker/seller is misleading right off the bat, run!
Well, my partner and I talked about it and felt we could do a quick flip for retail at 179K. So this is what I told the broker. She said she didn’t think the seller would accept but she would talk to him.
The next day, I received a call that the seller would accept 179K, (gee, without hesitation), but since it was an investment deal, he would want 10K deposit. I knew that was very high but my partner agreed to go for it (it was his money, not mine). Second lesson; 10K is WAAAAYYYYY to much for a deposit no matter what the circumstances.
The seller countered that he wanted close of escrow plus two days to turn over possession. I have run into problems with this before and refused to accept this. The seller agreed to having loan docs to the title company one week prior to close and this was added to the contract. (this will be revisited later).
A qualification letter was required within one week. Here is another of my errors. I did not follow up with the loan officer to verify that this had been done. Next thing I know, I am getting a letter that I am in breach of contract and had better wave all further contingencies and sign over the 10K to the seller or the contract was to be null and void. I contacted the loan officer and she said that brokers very rarely require this and ususally call her directly if they do want it and haven’t received it. She sent it immediately. This was not good enough though because it stated it was contingent upon the appraisal for which the broker couldn’t seem to coordinate with the appraiser for access.
They continued to demand we release all contingencies and escrow. We refused until she informed us that they had a back up offer on the house and, according to an addendum that we signed, they were entitled to entertain all offers and we would have first right of refusal only if we waved all contingencies. Here we go again. So, we waved. We knew there would be no issue getting the loan, the appraisal had finally come back and everything was kosher.
At this time, I am feeling ok. I assumed my troubles were over. Boy was I wrong. I was showing the property on the weekend before we closed. The seller then informs me that the moving company would be there on the following Saturday and they should be done by Sunday. I, as politely as I could, mentioned that we were closing on Friday and that was when we were supposed to have possession. He contacted his agent. They both said they would fax me the information proving that it was +2 days. I said if I signed it, I would agree to it. After having to call twice for the information, the broker sent me a letter she had written and signed (no sellers or buyers signatures) stating they would require 2 extra days. I was furious. Broker and I got into the debate as to the validity of this before she hung up on me.
What could I do at that point? We realized that, even though we had legal right to possession, we would not get it no matter what. So we proceeded to the title company to sign the closing docs.
This is when I discovered that the broker had altered the contract that we faxed to her. She had changed the possesion date after we had signed to reflect +2 days. The title company was well aware of this and wanted us to sign off on that. We refused but still proceeded with closing. I was finally able to obtain the keys yesterday. Luckily, the house was not destroyed.
Now on to getting it sold!
I learned one really big thing about myself. If I can make it through all that and still want to invest in real estate, I can make it in this business!
Thanks for letting me vent. See you all in Atlanta!
PS; and some of you thought yours was long!