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Heartbroken, need advice/vent - Buying our first home
I've been beside myself all night, unsure of what to do. You Knotties have been good at offering sound advice, so I came here.
We have started our house search. Our agent was always a little flakey, but we used him anyway. I regret it to my core now. I found all the listings we've seen and have spent far too much time doing things I think he should have been doing. The whole point of us using an agent was to take some of the pressure off me because I'm also wedding planning and job hunting.
Anyway, the second house we see we love. The neighborhood has been moving fast with competitively priced homes. Things are going on and off market in 3 or 4 days sometimes, and over asking. The market is relatively hot and I made the rookie mistake of trusting the realtor's advise to move quickly. He also told us that his market analysis revealed that the house was overpriced, but only by about 8k. Trusting that was mistake number 2.
We draw up an offer for 8k less than asking when the house had been on the market 8 days. The sellers are highly motivated and have outgrown the house. They need the cash from the sale to buy another larger house further out from the city. We thought we were doing good. We signed but the Easter weekend caused some unexpected delays and now I'm so thankful for that. The offer couldn't be sent.
Then my dad starts showing me comps he found. They are CONSIDERABLY under what we were even going to offer, let alone what they were asking. Even for houses that were similarly updated, larger in size, with similar lots and 2-car garages (the house we like is one of only a handful in the area that only has one), they sold for between $20k and $40k less than the asking for this house. So, we demand comps from our agent and see the truth. The house IS grossly overpriced and our agent knew it and recommended a higher offer than was really reasonable. All our family suggested an offer of $40k under asking. We decided to go in at $30k under, which was over $18k less than the previous offer we voided. We told the agent and abandoned our earlier offer, which was going to be a stretch for us to afford in the first place and that we were now no longer willing to give.
We got the new offer signed, a sellers lease agreement (which would help us both out) and we sent it off with a hand-written note from us. It took 5 attempts for our agent to get these documents correct. Details are clearly not his thing. Wrong dates, wrong names, mismatched amounts, etc. Finally, we send it out. Within hours we heard back. They accepted our offer as is at 12 days on market.
We were elated (and questioned whether our families were right and we should have offered less). We had our dance lesson and just beamed the whole time. WE BOUGHT A HOUSE!!!
And then I got a text to call our agent back.
I could tell by the sound of his voice that it wasn't good. He made a mistake. A big mistake. He sent the wrong offer. The original one. The one that we could barely afford and that the market didn't support. No wonder they accepted so quickly.
Now, we have to figure out what to do. Both sides are tainted at this point. They are probably just as heartbroken as we are. We are furious with our agent. We don't know what to do.
Our agent says (really not trusting him at this point) that all we can do is submit the correct offer and begin negotiations as normal. I think he's trying to save his own skin.
Thoughts?
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain
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Re: Heartbroken, need advice/vent - Buying our first home
Step one: Fire your REA. I had to do it, it sucks, but you're WAY better off.
Step two: Hire a lawyer.
Step three: Check the contract to see if there are contingencies to get out of contract. I had three in mine. The first was the home inspection, if there was ANY minor detail I didn't like from the home inspection, I could walk. The second was the mortgage company finalizing my mortgage (going through underwriters, etc). If they didn't approve the mortgage, the deal fell through. The third was that the appraisal had to be close to what I was purchasing the home for. So, if I signed a contract for a house and said "I'm paying $500,000 for this home!" and it's appraised for like $80,000, the deal fell through because the bank isn't going to give me that much money for a house that isn't worth that much.
Good luck.
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain
The PPs have given great advice and I hope that you are able to get this corrected.
Real estate is tough, we've had a rought time the past month ourselves... We had to walk away from a house after the inspection turned up some serious problems (plus the sellers were assholes). We just put in an offer on a new house last night and we are in contract to sell our house.
Hang in there! If the comps are really that different I doubt you will find a bank that will approve a mortgage for an amount that much higher than the comps.
I know we should fire him and we want to, and yet we keep moving on just to have progress. We love this house and don't want to lose it over a dumb mistake. The sellers seem willing enough to work with us.
It's been a learning experience, that's for sure. I am too trusting of people. It was also stupid to sign a contract if we weren't 100% sure. We thought we were 100%, but we had bad/no information (also his fault) and once we got it we realized we were making a huge mistake.
What we're working on right now is negotiating within the existing contract via amendments. They know we can walk at any moment if we so choose, so they're willing to work with us to get their house sold. They've lost two offers/contracts already and they're ready to get things done. They seem to like us from what their agent has passed on through our agent. We'll submit our intended offer in an amendment that would void the previous amount and replace it with this one. They can either accept that or counter us. The only difference in this and other negotiations is that we are currently in a contract and they can't entertain other offers. We have 11 days to come to an agreement before our right to terminate expires. If they don't come down on price, we'll terminate the contract and start over. If we can't reach an agreement soon, we'll let them out before that 11 days is up so that they're not trapped by a contract that's going nowhere. We don't want to be mean to them.
The guy is part of a firm with a sponsoring broker above him, so he is not independent. He says to just let us know if we want to work with someone else. He knows he messed up bad. I wish we could cut him out of a commission, but don't want this process to be difficult because we're throwing a fit about it. It's wrong and absolutely unacceptable, but he has a line of communication with the seller's agent already and I don't want to disrupt the flow. After this is a done deal (or not), we will look into reporting him to whatever board and to his supervising company. I hate to ruin anyone's life and I know being a real estate agent can be tough. But, when you're dealing with people's money, you should have more attention to details. He let it slip that after it happened and he told his wife, she said "you should have let me help you organize!" as if she knew that he had a problem with that sort of thing. He says it's his worst mistake ever, but I'm sure it's one of many. Everyone makes mistakes, but I cannot believe some of the things this guy has done wrong. If we do not get this house, we will absolutely be finding a new broker to work with, one that comes with personal recommendations from friends that I can trust.
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain
I probably am too nice.
I feel so sick right now dealing with all this. My stomach is all twisted up. Sometimes I can't eat and I'm not sleeping well. The stress is starting to take a toll. A family friend has offered to throw a shower for us and is super excited to start planning and I can't even be happy or think about making plans. It's too much.
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain
This is not a friendship, this is business. You are dealing with a TON of money. Property isn't cheap anywhere right now. I wouldn't be this easy on this ass-hat. Fire him immediately, if you lose the contract on the house, so be it, there will be another house. Do not get attached to a house until after you close on it. Another competent REA can pick up right where the shitty one did if you really want this house.
Seriously, if you want to keep this guy, think about how bad he's screwing up with your money. I would be livid. Absolutely livid. I'm angry for you right now.
I am angry. But, the problem is how much we love the house. It's practically perfect. I know that there can be other houses, but we don't want to lose this one.
With the protection clause I'm not sure how we can cut him out anyway. A coworker and friend of mine actually knows his supervising broker. He's surprised that this is allowed to happen if that broker is supervising him, as he knows that the broker knows his stuff and is a pretty hard hammer for his clients and thrives on reputation. For him to have such a lousy associate was surprising.
Of course, our agent insists he's a good agent.
I saw him yesterday and he was apologizing profusely (again) and promising to make it up to us. I said "I don't know how you plan to make it up to us" and he said something along the lines of "Well, I'm not going to let you hold this over my head for the rest of the time we work together. If you want out of this, just say something and I'll be happy to let you go." It seemed like he was mad at us for being upset. I was hoping he would say that he was cutting his commission or doing something else to really make a sacrifice to get us the house since he screwed up so royally. Of course, no such thing.
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain
That's the problem with falling in love with a hosue before you close. I have done this with condos. I start buying and arranging furniture in my mind and when we don't get the condo, I am devastated.
If you won't fire his ass at least talk to his broker (boss) and demand that at a minimum, another Realtor/the broker supervise your account until closing. Someone else should at least check over documents before they are submitted to make sure they are the right numbers, right documents, etc.
The seller pays realtor commissions, so unless he plans on cutting a check to you guys a loss of his commission is more a benefit to the seller than anything else (less they have to pay at closing).
I honestly don't know how changing real estate agents can be any worse than what you are dealing with right now. (Which sucks for everyone involved)
Fire your realtor. Now.We have an option period in the contract. We have already paid the fee to have this option available to us.
If they don't negotiate, we kill the offer with the option and the contract is void. Basically, we have the contract, but we have until next Thursday to either keep with it and be stuck or negotiate the terms and stay in it with revisions, or quit the contract by that time. We will not be stuck in the contract at this price because we would rather kill it and walk away than pay the price currently on the contract. We cannot be held to it if we terminate within the option period, no matter what. Since we REALLY want this house, it's worth it to try to work it out and risk the option fee. The sellers have already admitted that they'll take about $10k less than the signed offer. They just want to be done.
I was told that the contract was executed and binding from the moment it was signed by both parties. There was no pulling it or taking it back. It was done. It had to be revoked with the option anyway, as far as I know.
FI's father is a lawyer and we've been trying to reach him but he's being a jerk and not responding quickly.
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain
Have you talked to the Broker? How is s/he making this right since it was an agent error in the first place?
And you have to take some responsibility for this yourself. You shouldn't be buying a house if you have no idea what the house is really worth (looking at what else is available).
Before you made an offer you should have looked at comps with your agent to determine fair market value on similar homes and then determine what you were willing to offer based on the condition of the house. You shouldn't just pull a number out of thin air and go with it.
The sellers could be over/under pricing their house and if you don't check around you could get screwed (although it is already happened).
@AprilH81 - I've beaten myself up plenty. I know we were at fault for signing the previous high offer.
I looked at listings in the area but it turns out many are anticipating the hot market and pricing way over what they can reasonably get. The asking prices are all too high. Our agent did not show us any MLS sales data at all. He just said "go with this number" and that's it. We trusted him but realized our mistake before the offer was submitted. It is only when I threw a huge fit and requested it multiple times that I got actual closed sale comp data. And that is when we decided to cancel the original offer we signed, before it ever went anywhere. He has never sat down and discussed anything with us.
I have not talked to the broker, but our agent has asked for his advice with it, so the broker is aware of the mistake. I am heavily considering going down that road.
"They say there's no such place... as Paradise. Even if you search to the ends of the Earth, there's nothing there. No matter how far you walk, it's always the same road. It just goes on and on. But, in spite of that... Why am I so driven to find it? A voice calls to me... It says, 'Search for Paradise.' " - Kiba, Wolf's Rain