Over the years, I have experienced many unexpected and unforeseen issues in closing a real estate transaction. Here are a few of them.
A number of years ago, my customers from Brooklyn were under contract to buy a house in Teaneck. The attorney review was concluded, the inspections were all done and they had given the $30,000 down payment. They got their mortgage approval from the bank with the condition that they had to provide a gift letter from the girl’s father who was giving them $30,000 to qualify for the mortgage. The money was to be transferred right before closing.
Two weeks before closing the couple invited the parents to come out and look at the house. The father walked around downstairs, looked around and then exploded and said, “Over my dead body will I give a penny to buy this house.” All hell broke loose with the kids crying. The buyers informed the mortgage company and their approval was denied. The sellers were caught by surprise and were quite angry. They decided not to give the down payment back to the buyers.
The attorney for the buyers tried to get the down payment released, but he was not successful. The buyers lost the $30,000. The couple stayed in Brooklyn and never bought another house.
A year later I met the buyers at a wedding and I asked them how things were going They told me that they were shopping recently at a mall and they met the sellers of that house. The sellers were cordial and they inquired of them as to why they didn’t accept their offer. The young couple had no idea what they were talking about. The sellers informed them that they sold their house a few weeks later for $7,000 less than the original contract and that they were prepared to return $23,000 to them. The lawyers were involved in this negotiation. The buyers’ lawyer never followed through and did not contact his clients. The couple was devastated. After seeking legal advice with another attorney, they decided not to sue the original lawyer.
I try to pre-qualify all my clients, but you can never be sure of their ability to pay. I also ask of them if they are getting any assistance from family members to please include them from the beginning so as not to have a repeat of this disaster.
Another transaction that turned sour took place in Englewood about 10 years ago. My clients completed all their paperwork and we were in the last day of attorney review. They decided to have their inspection that day. The inspector was two hours into the inspection when the seller came home. The wife was at home during the inspection. The seller walks into the kitchen and blurts out, “You know, I accepted another offer today.” I responded that I did not know and that none of the lawyers informed us. I asked him why he didn’t tell us before my clients ordered an inspection. I also asked him why he did not give my clients an opportunity to counter offer on the new price. The seller refused to engage in any discussion.
The inspector charged the couple half price; the buyers were very disappointed as was I. We asked the wife why she allowed us to have the inspection when she knew there was another accepted offer. She, too, refused to respond. Needless to say we were all caught off guard. Unless there are extenuating circumstances, I suggest that buyers wait until the attorney review period is concluded before they arrange for an inspection. After attorney review the seller can only accept a backup offer and cannot break the original contract.
Happy House Hunting!
Martha (Malkie) Aaron is an agent for Anhalt Realty LLC.
By Malkie Aaron
