Archive for August 3rd, 2019

A Nightmare Real Estate Story – Groundhog Day Escrow

Posted on August 3, 2019. Filed under: escrow, First Time Buyer help, Orange County Real Estate, Real Estate Stories |

Groundhog escrow timeline (2)Do you love a good nail biting, back and forth drama flick? Or a hilarious Groundhog Day story that just couldn’t get any wackier? Since sometimes I feel like I’m in the middle of both of these flicks without a camera…I thought I would share with you. Getting this out there should feed your appetite for a good story, while I practice some humility and potentially lessen the PTSD. And **action**

Our Timeline – Deals Seem Great Until They Crumble

The story starts as a fairy tale with a full price offer, and a lender who was a trusted referral of the buyer’s agent. Here is how things started – escrow opened on April 11th, the Close of Escrow was scheduled May 10th. The deadline was missed meaning the tail chasing continued until May 17th. This caused the seller to become more and more anxious to close, while at the same time the buyer is refusing to close.

The seller asked to cancel the listing and pursue a different route – they wanted to sell with Zillow Offers. The Zillow Offer is verbal and is $50,000 LESS than all previous offers. The seller denies the offer. The buyer comes back to the table with a new offer – he can close with a new lender by the end of the month. The seller agrees but with a stipulation – the seller requests an immediate $2,000 deposit release and an additional $4,000 release if they do not close by 5 PM on July 1st.

Seller offers solution that covers $3,000 of the $4,500 in question. The buyers agent refuses to put addendum in writing, refuses to remove contingencies. On 5-29 a NEW offer is received & countered (but it was contingent on a sale). On 6-1 the seller tries to cancel my contract and states they would like to go with Zillow offers, I advised that they are under contract. They are resistant to follow the terms of the contract so I reiterate that they are welcome to sell to whomever they chose and are allowed not to sell the home however they are obligated to pay the commission fees. As a realtor, I completed the tasks it took to achieve a closing deal. The seller proceeds to initiate the Zillow offer anyway despite the fact that we are in a legal binding contract.

June 9th rolls around and we are notified that Zillow has proposed an “offer”. There is an inspection fee, a fee for estimated repairs, a Zillow convenience fee, and oh that didn’t cover any commissions. So Zillow really offered him $40,000 less after assessing fees and costs. As stated in our previous blog – Zillow Offer is providing you instant cash by cutting out the hassle – you are paying for this convenience by selling your house lower than market value.Real estate agent commissions are between 5-6%, if you are listing your home for 10-15% less than market value you are spending MORE money. Read more about how Zillow Offers work here. 

So to summarize the Zillow Offer: there is an initial below market value offer – deductions – estimated closing of $2,600 – estimated preparation & repair $3,000. The final offer is $40,000 below market value with a 72 hr deadline. Plus, the seller still owes my commission after that. The buyer comes back to the table on 6-10 saying they can close the loan IF the purchase price is a set price (above Zillow offer and above market value). The seller has a new tune now that he has sat on the market with only contingent offers or the Zillow *under marker value* offer.

We go back and forth on email and text with all, at least 2 email requests to send over a revised addendum. 48 hours go by, still no revised addendum in my inbox. My client keeps negotiating with himself the way Chris Voss tells us all to avoid (read his book here). I try to nicely explain this to him. It continues. If my client closes with this buyer we will be required to do all of the paperwork…again if the buyer closes with this lender.

The buyers agent edits the addendum manually, sends it to the lender, and doesn’t send it to us. We found out we had a fully executed addendum from the lender the next day. We are finally able to connect with the new lender and they seem confused that I don’t have the addendum too. We had already reached a closing disclosure –  a five-page form that provides final details about the mortgage loan you have selected. There are checks and balances through out this process, there are not just last minute surprises and missing documents by the time you reach closing disclosure. We experience some backpedals saying they may not have it fully executed. Best case scenario: we are left spinning our wheels, in a worst case scenario? Straight up fraud. The buyers agent is possibly the worst agent I have ever had to deal with. He abandoned his client, misled him, and left him to find his own lender. It was a shady process no matter the outcome. 

We come to an agreement that I will be the first to know if there are any hiccups with the loan; I tell her I’m just trying to protect my client. I’m still fighting for that same guy who wants to fire me. Because that is my job. All the while helping the buyer’s side get their full 3% commission. On 6-26 the deal finally closes. It is important for all of our clients to know and feel assured that as a real estate agent – we take several measures to protect a home buyer’s interests. It is a lenders objective when purchasing a home to protect their own financial interests. Real Estate Agents have a fiduciary duty to act with their clients (sellers and buyers) best interests in mind, through the highs and even the lows. We are working for you, to protect your financial interests and ensure that you are getting the best deal. Even through this nightmare real estate story, the clients best interest were always kept in mind.

Advertisements
Read Full Post | Make a Comment ( None so far )

    About

    Orange County, CA Real Estate for hip first-time buyers and investors. Plus, fun things to know and do in OC.

    RSS

    Subscribe Via RSS

    • Subscribe with Bloglines
    • Add your feed to Newsburst from CNET News.com
    • Subscribe in Google Reader
    • Add to My Yahoo!
    • Subscribe in NewsGator Online
    • The latest comments to all posts in RSS

    Meta

Liked it here?
Why not try sites on the blogroll...