good deal gone bad with friend? - Posted by Kathryn


#1

Posted by Kathryn on June 10, 2004 at 23:13:35:

I want to thank everyone (especially B.L.Renfrow and Kristine) who responded by posts and emails to my plea for advice. I have been carrying around this problem & stress for a week and it took all of you to lift most of it off of me with your great advice. I will contact the buyers tomorrow and cancel the contract and return the deposit. I will not worry about getting arrested and I will let my husbands best friend deal with them. I will learn that I must have a signed contract (and watch them sign it)and either do a double close, or tie up the property in escrow so there is none of this again. I am still angry but I will work on standing tall in front of my husband, because there will be other deals & let his “best friend” look like the jerk that he is. All this over money. This became not about money for me when he treated me wrong, but I will deal with it and move on. Thanks again Creonline Posters, your the best!


#2

good deal gone bad with friend? - Posted by Kathryn

Posted by Kathryn on June 09, 2004 at 21:52:28:

I have to post this or I might explode. My husband’s best friend had a home for sale “on the creek”. He paid only 160k for it last year & I knew this area was popular to invest in. I asked him if I could “buy” it from him to resell to investors. I asked him how much he wanted & what day next week he wanted to close. He seemed suprised but said yes. He wanted 200k when the smoked cleared, even though the house appraised at 239k. I told him that if I couldn’t sell it in 2 weeks, the deal was off. It took about a week to catch up to him to get a key, so I could see what I was selling and to then write up a contract. The key came but not the contract. Within days, I found a buyer for 229k(they would pay ALL closing costs,since I was giving them 10k in instant equity) but I was adament to him that I need a “contract” signed first, before I could sell it. At first he told me not to worry, he would not nark me out. Then the more I pressed, he seemed not available because he is so busy. The day I was to “sell” to the buyer, I went to him and said I must have a contract made immediately. He said ok. I had asked him twice in our dealings if his wife was on title, he said no. I made the contract out, gave it to him, and actually believed he signed it. (since he had pen over the contract} I asked for him to make a copy right in his office. I took the contract, and on my way to buyer to sign her up, I looked at the contract, and found that he really did not sign. Since I was running late for the buyer, I only called him and let him know I was not happy with him not signing. Anyway, I signed the buyer for 229k, went back to his office with my new contract, and asked him to sign. The buyer had the printout of the mortgage info, and his wife WAS on it. I told him I needed his wife to sign and I will pick up next day. I also had explained the process of what I was doing and the difference of 200k and what I sold it for, was my profit. I had asked early on if he had a problem with me making 15k and up and he said no. When he seen the profit I was making, after I sold it for 229k, I changed the price to pay him 205k instead of 200k, and showed him the difference. Again, no problem. Now the closing is next Tuesday, and I know, you can see this coming, but still I have NO contract. He is angry and says it is not fair, and we must renegotiate, which I agree since he is my husbands best friend, but as of yet, still no contract and no negotiation. I don’t care if I get a dollar, I do not want to get arrested nor do want to come between my husband and his best friend. His friend is a successful contractor and is experienced in investing himself. I on the other hand, do not have his money nor his expertise, yet I am not stupid (thanks to Creonline) and I know what I told him and I explained myself many times to be sure he understood what I was doing. Now he knows I have no contract with him and I now believe he had no intention of signing one in the first place. The buyer is a real estate agent and I cannot see my way clear through this. I want to tell the buyers and come clean, but husband and him seem to be talking about what to do. I can think of 69,000 reasons why he wants to dump me on this deal, but like I said, I don’t care about the money, I just don’t want to be arrested for selling a house without owning it. I have been beating myself up about allowing this to go this far, but when it is a good friend, you can’t just treat them like you do if it was a total stranger. He knew I would trust him since his connection with my family. Obviously, I would have never did this and trusted him if he were a stranger. Any advice will be welcome,legal, moral, and otherwise; even if is: I told you so!


#3

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#4

Re: good deal gone bad with friend? - Posted by FrankIL

Posted by FrankIL on June 11, 2004 at 09:06:55:

Kathryn - several things to learn from this lesson. It seems you rushed the deal and didn’t get more info up front. You went immediately to a contract situation based on knowing him as a friend and then applied pressure. Then when he was hesitant you appeared panicky to him and told him you would be arrested if you didn’t close the deal. Remember that a confused mind always says no. If I was in his shoes I would have been suspicious about your intentions as well - even though they were genuine. I would be thinking to myself “what’s going on here - why is she pressuring me so much on this issue”.


#5

Re: good deal gone bad with friend? - Posted by Frank Chin

Posted by Frank Chin on June 11, 2004 at 08:20:10:

Kathryn:

If I was your husband’s friend, and I said to you “I think I’ll sell you a 239K house for 200K”, there’s a possiblity I might mention this to my wife, and she’ll start screaming “are you crazy, do you know how hard we’ll have to work to make 39K”.

What do I do now??

And how would I feel when I get constant calls from you for a contract?? And what would I think if you then told me that you sold my house for 229K, and you’ll give me 5k more, for 205K?? And then its my fault that I didn’t give you a contract fast enough.

Lesson?? Get the contract. Never assume anything. I had this happen to me this week.

I had to hire someone for my biz, but my cell phone broke. I was going place a classified in the paper starting last Thursday with the replacement phone because AT&T was supposed to Fedex me the phone by last Wednesday.

The manager at my biz said “are you sure you want to put that number in ASSUMING the phone will get here tomorrow. I wouldn’t”

Know what??

I still didn’t get the phone, and I was yelling and screaming yesterday, and got the supervisor. So I’ll get it the next day or so, but it’'ll be “free of charge”. They had no idea what happended.

NEVER NEVER ASSUME.

Frank Chin


#6

Re: good deal gone bad with friend? - Posted by JD

Posted by JD on June 10, 2004 at 13:51:20:

you say: “I don’t care if I get a dollar, …”

if this is true, I don’t see your problem.


#7

Re: good deal gone bad with friend? - Posted by E.Eka

Posted by E.Eka on June 10, 2004 at 12:21:34:

That’s why you get EVERYTHING in writing.
After the it took you days to get a hold of him, you should have nixed the deal. He didn’t think you’d be able to perform on the contract.
On the other hand, if you split the profit down the middle, you still could have had some money rather then none…and an angry friend of your husband.


#8

Re: good deal gone bad with friend? - Posted by B.L.Renfrow

Posted by B.L.Renfrow on June 10, 2004 at 10:05:52:

First, you aren’t going to get arrested. You have committed no crime. At worst, you will have to return your buyer’s deposit and cancel the contract with them. They may very well be angry, but there’s no criminal offense here.

For what it’s worth, I’ve never been a big fan of deals with friends and family. I know some people make it work, but to me, it’s difficult to reconcile the expectations of friends/family and the need to run a profitable business. Friends/family typically expect a “better” deal than the general public would get, whether it’s a higher price when you are buying or a lower price when selling. I have done a deal with family (well, my ex-wife’s family member) and I won’t do it again. The deal had all kinds of problems, and I wouldn’t have even touched it if the family member didn’t beg. It didn’t work out well.

As you now are well aware, a verbal contract isn’t worth the paper it isn’t written on, I don’t care if it’s with your mother. Contracts need to be in writing, and need to be specific before you try to sell something in which you don’t have an interest.

At this point, if you can’t work out a mutually agreeable solution with the seller, I’d walk away, consider it a lesson learned and let him solve his problem himself.

Brian (NY)


#9

Re: good deal gone bad with friend? - Posted by Tim

Posted by Tim on June 10, 2004 at 06:42:52:

I agree with Kristine, with one exception. I wouldn’t take it personally, it is just business. However, I really don’t want people who do business this way as friends. Unless the guy honored his verbal agreement I’d drop him as a friend.


#10

Re: good deal gone bad with friend? - Posted by Kristine-CA

Posted by Kristine-CA on June 09, 2004 at 23:58:01:

Kathryn: Ouch. I feel your frustration. I think it’s funny that you say that you can’t treat a good friend like you treat a total stranger. How badly do you treat total strangers, anyway? :slight_smile:

I’m not a lawyer, but I wouldn’t worry too much about the buyers and selling a house you don’t own. If worse comes to worst, you can probably cancel your contract with the buyers and return any deposit. So, you thought you had beneficial interest–but verbal interest isn’t what you needed. So, now you know for next time–get a signed contract sister. I’ve done exactly the same thing before–more than once. And now I never, never tell anyone that I’m selling anything until the contract is in escrow. Even regular buyers that I trust. I need the seller to get that contract into escrow before I let anybody look at anything

I still think you can save this deal, but maybe it needs to look a little different. You brought the guy a buyer. And you say he is a family friend. Find out what he thinks is “fair” for bringing a buyer for $229K. An agent commission would be 14K. And I don’t think you should go lower than that, by the way. He still comes out ahead, you’re ahead, and his house is sold.

There are various ways to deal with the paperwork, but at least listen to what he has to say about what he thinks is fair and what is not. And don’t defend yourself or explain anything. Just listen. He has seller’s remorse. I have it every time I do a deal because my man always thinks I could have gotten more. But I would never back out of an agreement. It’s very difficult for people to see other people make money on their house. When it’s an agent, they’ve had to agree to the listing and the commission. When it’s a friend, it’s like, what? 15K for putting a contract together? I’m sure he thought he didn’t mind until he really started looking at his profit vs. yours. Remember, it’s not personal. This is just his stuff about money, about profit, etc. Remember that (and it’s so hard to remember) this is not about you. This is one of my challenges every day. People have their own stuff. And you have yours.

Let us know how it turns out, by the way. Kristine


#11

AT & T Wireless (F.Chin) - Posted by Rob

Posted by Rob on June 11, 2004 at 11:38:22:

AT&T wireless system is the crap. I am working on a deal, and I can’t get the calls, or call out in my house. I complained, and they told me that you still use the phone.

Lesson: Keep complaining. I, just didn’t want to be bothersome, and was very busy.

Result: No discount, or anything. Next time complain, and get it on record.


#12

Re: good deal gone bad with friend? - Posted by Kathryn

Posted by Kathryn on June 10, 2004 at 22:42:32:

Thanks for responding to my post. I understand what you mean that if I did not care about the money, but It became more than that.

I became angry because of the way he treated me after I told him that I could be arrested for selling a home I did not own. Also, he denied we had a contract and that he never gave me permission to sell his home and also “not working hard for my money”. I am also angry that he would treat his best friends wife this way. He would not only be hurting me, but my husband too. We have 2 school aged children and so does he. All this over money, which is why I would have rather dropped the whole thing and backed out gracefully. But with a contract with the new buyer and a deposit, I had run out of options without my contract with him. He held the key to letting me out of this mess by signing the orignal contract and literally giving me a $1.00 assignment fee, but no; he choose to get nasty and greedy.

That is why I am angry. It is not about the money.


#13

Re: good deal gone bad with friend? - Posted by Chuck Rosenberg

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