Posted by SusanL.–FL on June 22, 2000 at 14:03:06:
Posted by SusanL.–FL on June 22, 2000 at 14:03:06:
Is it worth me keeping the money… - Posted by Scott SC
Posted by Scott SC on June 22, 2000 at 09:52:11:
Alright guys here’s the deal:
1 week ago I sold one of my homes on a LC. The guy signed all the necessary documents and gave me $5,000 down. He is supposed to move in today. I get a message from a woman I’ve never spoken to on the answering machine saying she was a ‘friend’ of his and she feels skeptical about the deal because her friend (the buyer) didn’t get to see any kind of appraisal, didn’t get to see an inspection, and the interest rate was way to high (%11.5). In other words she’s totally discouraged the buyer and now he feels like some kind of victim.
The house appraised at $79,000 at my closing and I sold it to him at $76,500 with $5k down. I call him up this morning and he says he’s had a change of heart and he just doesn’t feel right about the deal and basically, since my interest rate is so high (?) and I didn’t show him any appraisal, that I am a crook.
I tried to work it out but he wanted out and he wants his money. I told him, and explained when he signed the papers, that he does not get his money back if he backs out.
I have a call into my lawyer but I want to see what you guys think about this one.
Re: Is it worth me keeping the money… - Posted by Jeff-FL
Posted by Jeff-FL on June 23, 2000 at 22:41:57:
$500 (10%) should get his attention if you decide to release him from the contract. He’ll probably be glad to pay it. Of course, there are some hard core guys on this board who would like to see you keep all of it (which you are probably entitled to do). But sometimes, a little compassion is in order.
Personally, I’d keep $500 (or whatever costs you have incurred if more than this) and return the balance of the $5000 to him. AND I’d get some sort of release (see your attorney) to ensure he doesn’t have any ideas about coming after the $500. (small claims court, etc.)
If you’re really feeling magnanamous, tell him where he screwed up and how he should do it correctly the next time. Hopefully, this will spare everyone some grief the next time he ventures into real estate.
Re: Is it worth me keeping the money… - Posted by Brian_CA
Posted by Brian_CA on June 23, 2000 at 10:00:48:
I agree with Rob. It really is not worth the stress to hold this guy to the contract. After all you can always find another buyer. Perhaps this is a matter of customer service. If the customer is unhappy, then why hold him to anything? Charge him for the cost of your time and effort (after all you deserve to be paid for that). Let this guy go his own way. It is not worth your reputation as a solid business person and the stress of a lengthy and costly court battle. Just be polite and let this prospect go.
Re: Is it worth me keeping the money… - Posted by Rob FL
Posted by Rob FL on June 23, 2000 at 08:31:08:
In addition to what the others said, remember that we are dealing with people here. People unfortunately change their minds. I have had tenants and buyers change their minds in the past after everything was signed off and cashier’s checks paid to me.
I would do my best to try and work things out, but if you can’t, I would try and be reasonable with them. Unless you don’t think you will find another buyer in the near future I wouldn’t go dragging them into court. It is far more trouble and aggravation than it is worth (and what if the judge agrees with the buyer for some reason – could be very expensive). Tell them you will release them from the contract for a small fee of a few hundred dollars and refund the rest to them. This is for your time and trouble.
Just my opinion.
Re: Is it worth me keeping the money… - Posted by dew
Posted by dew on June 22, 2000 at 23:45:01:
You “TOLD” him he couldn’t get his money back.
Does the phrase “put everything in writing” take on a new meaning based on this problem?
Re: Is it worth me keeping the money… - Posted by SCook85
Posted by SCook85 on June 22, 2000 at 16:22:33:
In addition to what JohnBoy said, you should also remind the Buyer that they thought this was a good deal when they signed the contract. Ask them what has changed (make them acknowledge that their friend is getting in the way). You tell them nothing has changed. The interest rate is low. Tell him he is welcome to shop for a better rate and if he can get it you will still sell him the home, and you won’t have any hard feelings. If he can’t get a better rate you will still honor your 11.5%.
Re: Is it worth me keeping the money… - Posted by JohnBoy
Posted by JohnBoy on June 22, 2000 at 11:15:48:
You are not responsible to give him an appraisal. HE is responsible to pay for and obtain an appraisal if he chooses to BEFORE signing a contract if he was worried about it. Also, you are not even responsible for selling him the home at or below the appraised value. It’s YOUR house. YOU can put any price on you want regardless of what it appraises for. If the BUYER doesn’t like the price, terms, or whatever, then they don’t have to buy it! Period!
If he doesn’t like the interest rate and thinks he can get better, then he can just REFINANCE the property and pay off the Land Contract! Tell him, anytime you choose to get a better rate by refinancing, that’s your right to do so. Go get another loan.
I would also threaten his friend with a lawsuit for tortious interference on your contract. Everything was fine until she stuck her face into it and started calling you up. Don’t even discuss anything with her. It’s NONE of her business!
Also, it’s not up to the seller to furnish an inspection. That’s up to the BUYER to do if that’s what they choose to do and pay for it if they want it done by a professional home inspector.
If the buyer wants out of this deal then if you choose too, you can work something out to let him out of the BALANCE of the contract if you want to be generous about this. Meanwhile this will end up costing YOU money to market the property again. It will cost you more money in holding costs until you find another buyer again. He should be thankful you don’t file suit for specific performance to inforse his end of the contract. He’s getting out easy for a guy that just suddenly had a change of heart! Sounds like maybe his FRIEND has somrthing better to offer him and may be trying to get him out of this deal.
By the way, 11.5% interest is more than a fair rate for a Land Contract. Especially if it’s offered to a buyer that can’t even qualify for a mortgage!
Talk to your lawyer… - Posted by SusanL.–FL
Posted by SusanL.–FL on June 22, 2000 at 11:05:31:
If it were me, I wouldn’t suddenly go changing any of the terms and conditions in mid streeam. It might make the original deal look ‘shaky’ if you did.
Besides! You AREN’T charging usury interest rates! 11.5% is well within the scope.
Too bad that meddleson fool stuck her nose where it didn’t belong.
Talk to your lawyer and see what he sez.
GOOD luck! Hope you $win$ this ‘round’.
You have done nothing wrong. - Posted by GL
Posted by GL on June 22, 2000 at 10:20:50:
His ‘friend’ has no kind of say in this. Unless she is his wife or legal guardian. He signed a legitimate deal and he must abide by his word. Did you lie to him, deceive him or cheat him in any way? If the answer is no then you have done nothing wrong.
You say he object now because he has not got an appraisal and the interest rate is too high. I suggest you sit down and talk to him and show him the appraisal. Offer to change the price to $79,000 to match the appraisal. Offer to match any legitimate interest rate he can get from any lender. Insist on a written commitment from the lender.
If you cannot talk sense to him and get him to keep the deal then the hell with him. Keep the deposit as agreed. If he is halfway sensible and doesn’t insult you give him back part of his money. Otherwise tell him you are keeping all of it and he is lucky you don’t sue him for reneging on his word and make him take it or pay damages.