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Post this in City Data's Real Estate Forum. There are experts on there who may be able to give you solid, professional insight on what to do in this situation.
They are very good and there are lots of them.
FYI-- I'm not a realtor.
Dear Cohdane,
I posted here because I found a lot of posting having to do with real estate, but I can't find the forum that deals with this exclusively.
Thanks for your help.
The first showing:
We called the listing agent Sue to ask her to show us the house. She said she was not available, but her daughter would come instead. Turns out that her daughter Jennifer is "a buyer's agent", but we did not figure this out until she came and showed the house. Told us that the sellers had moved out of state and needed to sell the house, because they had defaulted on their payments and now it is a short sale (nothing on the listing said so). We asked explanations on the terms of a short sale and asked if that would make things more complicated.
The answer: Nowadays bank are all ready to deal with these situations. You negociate with the seller, and you get the bank approval. No problem, Sue is a specialist of distressed properties, she has the bank all contacted and it won't take any longer, 2 or 3 days after you sign with the seller, you will have the confirmation from the bank.
This was very important to us because at the same time, we were signing a contract on our current house.
The second showing:
As we signed a contract on our own house, we asked for a second showing. Jennifer is on vacations so Sue comes to show us the house. She repeats the same info as what Jennifer said. No problem, the bank is warned that a contract is coming.
At this point, I mentioned that I did not feel comfortable dealing with a mother/daughter team, as nobody was really representing our best interest. The answer from Sue was that Jennifer is a great agent, would never confuse issues, no worries.
The offer:
We decided to make an offer on the house, but Jennifer is still on vacations, so Sue offers to do the contract. As the listing agent, she says that she can't give us any advice. We go ahead and make the offer.
The negociation:
The sellers apparently are not fluent in English, it makes everything complicated, but through their son, we come to an aggreement. Their reluctance to sign the offer is because our offer does not cover what they still owe on the house and they have a second mortgage.
At this point, we ask if either situation are going to be a problem. No, says Sue through Jennifer, the bank has aggreed to the short sale, the sellers will be forgiven the difference, and the second mortgage is not our problem.
We have a contract!
We supply a copy of our contract for the sale of our house, our buyers pre-approval, our pre-approval, because we were told by Sue that with all the info from the start and with the bank being ready to deal with it, it will go really fast and easy.
We get a call that the sellers have signed and the contract is gone to the bank. Then we get a call that the signature page was missing therefore they are trying to get the missing page. And no, it has not gone to the bank. The next day, we get another call saying that they have the missing page and now the contract has gone to the bank.
Now the paperwork is being dealt with by a new gal called Amy. She calls and says that they are still waiting for the missing page, so of course nothing has gone to the bank, and don't worry, I will call you once a week for the update. WHAT??? We explain to her what we were told and she answers:
- It will takes a couple of weeks for the bank to even give the file to one of their people.
- It will take weeks for anything to be confirmed, because the sellers have a FHA loan on the house, it makes everything more complicated.
- Then it will need to be approved by whomever is holding the second mortgage on the house.
- The bank has not approved the short sale to start with, so we have to go through a lengthy process.
When the "2 or 3 days to get the bank approval" turned into the "2 weeks to get an agent to get the file" I called Jennifer and told her that visibly they had lied to us to get the sale done. She said that "WE had misunderstood" (I checked with my husband if he had heard the same thing that I did - he did), that she had said that it would take the bank 2 or 3 days to receive the file!!!
Then the lies have visibly accumulated and the fact that the house is NOT pre-approved by the bank for a short sale scares me. What other lies are out there?
Is the seller going to be short-changed because she told them they would be forgiven for the balance between our price and what they owe? What about their second mortgage? I can't help but thinking that with both of us speaking English they lead us by the nose to believe anything, what about those poor sellers in WI?
Also, she told us that "banks always accept the amount on the offer". Is that true? Or can they come back with a counter-offer?
I want to ditch our "buyer's agent" who did nothing for us, except show us the house. She also opened the house for the house inspector, arrived with missing keys, and managed to half ruin the garage door by running it over a padlock. She has not done anything that justifies that she should be paid a commission. Can we do this?
We have a friend who is a real-estate agent and we really wanted to use her as our buyer's agent, but the mother/daughter team made us believe that for such a project it was better to go with them because of their specific experience on short-sales and foreclosures.
With her mother buying the seller's agent, can this ruin our chances at buying the house?
And with so many lies, can we complain somewhere or get straight information somewhere? I can't trust either of them as they have been repeating the same lies.
Any help is appreciated.
It's unfortunate that there are some bad apples that make the rest of us realtors look bad. As a buyer you need to educate yourself on what the different types of properties there are now. Short sales are properties that the seller is trying to get the bank to release at a much discounted price, Sellers try this first in order to try and save theirredit from going intirely in the toilet.
Short sales are not ever going to be easy the owner is still involved and sois the bank, if there is a second loan on a property it is even harder, due to the fact that a seller has to try and get the second to completely write off the loan, and some firsts won't negotiate until the second is rectified.
Short sales aren't for the buyer who would like a 30 day close, it's more like months and most of the time they end up in foreclosure.
Forelcosure is the next step after a unsuccessful short sale or some sellers go directly into foreclosure without trying the short sale.
The definition of a foreclosure is:Foreclosure is the legal proceeding in which a mortgagee, or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption.
note the word proceeding it doesn't mean the bank owns it yet, so that is why foreclosures are very difficult to get closed.
Once a bank has finished with the proceedings of a foreclosure then it becomes an REO (bank owned) usually by then the banks are more than ready to get rid of them. I will warn you though nothing is easy any more the banks are understaffed, the title companies are understaffed, appraisors are understaffed. So depending on what part of the country your from will depend on how long it takes.
When you are looking for a Realtor ask for references, or ask your friends who they used. IF you want to report a realtor contact the real-estate
division. Also anytime you feel there is a conflict of interest contact the agents broker and ask for a different agent. I would suggest you cancel your especially since it wasn't accepted, you have to have it in writing, if you don't and find another property to purchase and the first one you made an offer on gets excepted than you could be on the hook to purchase that as well.
Also did the buyers agent have you sign and exclusive agent contract meaning that if you should purchase anything without them you will have to pay their commission as well? If so how long is it for?
As a buyer you have to educate yourself, realtors are licensed and take and oath,unfortunately you only hear about the bad ones. There is a saying that is if you have a bad experience you will tell 10 people ,with the internet millions but if you have a great or good experience you will tell 1 person. Sorry for your unfortunate expereince and good luck house hunting.
Dear Mom,
Thank you. This is very clear information. What you are saying goes completely opposite what they said. They had talked to the bank, the bank had agreed to the short sale, the second mortgage was not problem, it would go really fast and easy, etc.
They are under a Remax banner. I have a feeling that they are somewhat independant, but I am in the process of checking this. We gave earnest money, I think it's in Remax's name.
Yours truly,
Miss Frog
I hope that your experience is the exception to the rule and this works out for you.
Mother and daughter are independent contractors and their respective licenses are with a local Re/Max franchise. That office is holding your earnest money in escrow. That office has a managing broker. Give him/her a call. Your contract is with the broker, not the agent.
And again, I implore you to seek legal representation if you have not already done so. Illinois is an attorney review state. It is customary for an attorney to review all contracts, regardless of which side of the transaction.
It's unfortunate that there are some bad apples that make the rest of us realtors look bad. As a buyer you need to educate yourself on what the different types of properties there are now. Short sales are properties that the seller is trying to get the bank to release at a much discounted price, Sellers try this first in order to try and save theirredit from going intirely in the toilet.
Short sales are not ever going to be easy the owner is still involved and sois the bank, if there is a second loan on a property it is even harder, due to the fact that a seller has to try and get the second to completely write off the loan, and some firsts won't negotiate until the second is rectified.
Short sales aren't for the buyer who would like a 30 day close, it's more like months and most of the time they end up in foreclosure.
Forelcosure is the next step after a unsuccessful short sale or some sellers go directly into foreclosure without trying the short sale.
The definition of a foreclosure is:Foreclosure is the legal proceeding in which a mortgagee, or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption.
note the word proceeding it doesn't mean the bank owns it yet, so that is why foreclosures are very difficult to get closed.
Once a bank has finished with the proceedings of a foreclosure then it becomes an REO (bank owned) usually by then the banks are more than ready to get rid of them. I will warn you though nothing is easy any more the banks are understaffed, the title companies are understaffed, appraisors are understaffed. So depending on what part of the country your from will depend on how long it takes.
When you are looking for a Realtor ask for references, or ask your friends who they used. IF you want to report a realtor contact the real-estate
division. Also anytime you feel there is a conflict of interest contact the agents broker and ask for a different agent. I would suggest you cancel your especially since it wasn't accepted, you have to have it in writing, if you don't and find another property to purchase and the first one you made an offer on gets excepted than you could be on the hook to purchase that as well.
Also did the buyers agent have you sign and exclusive agent contract meaning that if you should purchase anything without them you will have to pay their commission as well? If so how long is it for?
As a buyer you have to educate yourself, realtors are licensed and take and oath,unfortunately you only hear about the bad ones. There is a saying that is if you have a bad experience you will tell 10 people ,with the internet millions but if you have a great or good experience you will tell 1 person. Sorry for your unfortunate expereince and good luck house hunting.
Dear License,
Thanks also for your input. I agree that you near only the bad stories, not the good ones. We have a lawyer and I am waiting to hear what she thinks. We don't have a contract with them, thank heaven.
The house we found is very special (unusual architecture) and we really hope to get it. We have time, but dealing with obvious liers is just horrible, and I just hope that the whole thing does not just vanish, leaving us with no house to buy, and our own house sold. I told my husband today that we should look at other options, just in case...
I hope that your experience is the exception to the rule and this works out for you.
Mother and daughter are independent contractors and their respective licenses are with a local Re/Max franchise. That office is holding your earnest money in escrow. That office has a managing broker. Give him/her a call. Your contract is with the broker, not the agent.
And again, I implore you to seek legal representation if you have not already done so. Illinois is an attorney review state. It is customary for an attorney to review all contracts, regardless of which side of the transaction.
Thanks again! I am starting to look for who is in charge at that Remax office, because I can't believe that they would be happy to know how their agents are treating their customers. We looked online about what people had to say about short sales and found all these horror stories but most were from 2007. We asked the realtors all the questions and they were so positive that times have changed, banks don't want to own real estate that they are ready to deal, especially for this deal, it's all agreed upon, etc.
I am thinking of calling a meeting at their office with whomever is in charge (the managing broker?), Amy the paperwork person, and the two agents and have them repeat in front of this person what they said so that we have one story. Nobody is going to like this... but it may help us in the long run understand what our situation and options are.
What do you think?
Here is a link to a recent post with a decent outcome. Please note that the poster was able to buy quickly but the owners needed to stay in the house for 30 days after closing.
I am not sure if there is such a thing as a clean short sale.
I am thinking of calling a meeting at their office with whomever is in charge (the managing broker?), Amy the paperwork person, and the two agents and have them repeat in front of this person what they said so that we have one story. Nobody is going to like this... but it may help us in the long run understand what our situation and options are.
What do you think?
Excellent idea.
Most likely the broker and agents belong to a local board of Realtors that demands honesty and fairness for all consumers. There are several boards within the greater Chicagoland area. Most likely the name of their board is on the original contract. This is another avenue if you do not get satisfaction at your meeting.
Really what happened and i hate to push it on you but i think you and your husband approached the buying process without being completely informed. I'm sure you saw the house, really liked it, and were jumping up and down when you saw the low price.
What this realtor is, is a "dual-agent" which is the seller signed a form allowing this which is the same listing agent will be able to represent the buyer as well, but they in turn will give you as the buyer little help or deep information as they can't. The reason realtors like to get this is that the agent will get the full buyer's AND seller's commission. I'm sure you just called the number on the sign in the yard and went from there which is a bad idea. ALWAYS go with a 3rd party, devoted buyer's agent so they will be representing you and you only.
Secondly most any good realtor will tell you if you see that "short sale" in the listing, RUN. Short sales are the hardest to work with as you have to negotiate with the seller, then the seller needs to see if the bank will accept that and what they owe and if they will settle. Then the bank needs to process your offer to see if they will even accept which takes weeks if your lucky, but most likely months to just get a "NO" answer, or have someone come in right when you are about to close, throw in an offer of $1,000 more and take the house out from under you.
I would really do my best to get out of this situation completely and look for a "clean" house that is for sale, or even a full foreclosure as you will be dealing directly with the bank, but also there will be no inspections, possibly things missing in the house, not working,.no warranties, etc,..
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