Buying a House

[mayanfire]

I am so frustrated! I feel like a dog who is being forced to jump threw burning hoops!

My dad found a house for $20,000 in the town that I live. It is a bank foreclosure and the people who had owned the place had trashed it before they left. They smashed all the drywall, broke windows, broke toilets and sinks, etc, etc. I guess they had wanted the value of the house to be next to nothing (which is is now). But it's a huge house with so much potential. My mom and dad built a house together (they're divorced now), so fixing everything won't be a problem. (Plus my uncles are contractors).

Anyway, my dad was in a car accident last year and is getting a settlement from his lawyers and he's a mechanic with his own junk yard. He's crushing cars, which is going to give him another lump sum of money. He came up with the idea of buying the house and letting us pay him back, so that we won't end up owing a fortune through a mortgage.

Anyway, so my dad talked to the agent, told him to draw up the papers, etc. (The only property my mom and dad ever bought has been through family, so we didn't have to go through any of this stuff). The agent told my dad we would need $500 down. So he took a check up for $500 and signed the papers with a bid (or whatever it's called) of $15,000. The next day the agent called and said that before the bank would even consider our offer, they needed another $500. So my dad took another check up for $500.

Then the agent told my dad that he needed to see my dad's bank statement saying he had the full $15,000. I can understand why the bank wants to know that my dad really can deliver with the money. They don't want to waste their time. But if the agent would have told us this from the beginning, we could have had the money. So he gave us less than 24 hours to come up with $15,000. My dads insurance check is at the lawyers, but after he signs the check, it will take 3 – 7 days for it to clear with the lawyer, then my dad will get a check for his portion from the lawyer. If the agent would have told my dad this from the beginning, he could have called the lawyer and gotten the ball rolling.

So now we have until this evening to come up with the money. Now, my boyfriend has the cash (he's a workaholic and doesn't buy anything). My father is very embarrassed that I asked my bf for the $$, but I really want this house! It's huge! So my boyfriend is bringing over a check for $15,000 (which is a really big thing for him). He reminds me of scrooge mcduck from duck tales. If he could swim in his money, he would. *LOL* It will be repaid before the end of the month, but, I still feel bad about it.

I'm just so frustrated, because I'm afraid that next they are going to come up with some other obstacle. And my dad even asked the guy in the beginning how long he would have to get the money, and he was told by the close date. They set a close date of Oct 15 or 16th. I just feel like they are dangling the house in our faces, and every time we get close, they yank it a little further up.

I just feel like crying! I hope that buying a house isn't this hard and confusing for everyone. We really should have researched it better, but it just kind of fell in our lap. At that price, we knew it would not last long. As a matter of fact, my brother was just at the house yesterday (it's near the house we are renting right now), and a guy was looking at, and he was willing to pay the full $20,000. (We are willing to pay that too, but we were told to give a low bid first. I hope that wasn't bad advice). I just want to beat my head off a wall!!!

Thank you for reading this...Sorry it was so long.

[daltregirl]

If you fathers lawyer has the funds already and they are just waiting disbursment - ask the lawyer to provide a letter to the bank stating this fact, or better yet, have the lawyer call the bank and explain the situation to them and maybe the bank will accept that. If your dad is in good with the lawyer, maybe the lawyer would put up the money ahead of time in the form of a bank check made out to the bank for the purchase price. This may seal your deal.

If the bank knows that there is someone out there who will pay full price, and without anything in writing that they have accepted your offer, they can and will take the higher offer.

This is an instance where it would be wise to pay a real estate commission to an agent working for you - Buyers Agent. Let them deal with the details. At 5% commission it would be less than $1,000 on the original $15,000 offer.

[shelleyf]

I am sorry this is happening to you. I don't know what you should do, but you might have to offer more than the 20 k that the other guy is willing to pay to get it. I will pray that everything works out for you.

[MrsPinecone]

Foreclosures are like that.

My mom recently put in an offer on one, and she had the entire $281,000 in cash, or would in 2 weeks when her place closes. The bank needed $25K just to apply for purchase and then said they wouldn't accept a contingency (her place closing).

Needless to say, mom bought a different place.

[billig]

Since this is a common thing, what's the reasoning behind the people who trash a house before foreclosure?
Is it just their anger and frustration?
Do they think the bank is stealing from them by taking their house back?
(which with some of the scamming mortgage loaners we've had in north Minneapolis I believe some have been not only taken advantage of, but basically robbed)
If I couldn't afford my house anymore and had a date I had to move out by, I wouldn't trash the house. I respect the house too much I guess.

[MrsPinecone]

They trash it because if they can't have it, they don't want it to be easy for anyone else, either. Very grown-up attitude, but remember-- these are people who don't think paying their bills is mandatory, either.

When you sign paperwork, it is expected that you have read and understood everything that you are agreeing to. If you didn't bother to do that, you have no one to blame but yourself.

[shetlandponyluvr]

Good luck with all of this. Sorry it's been so difficult.

[mrsdatabits]

I can totally understand your frustration! We had a similar thing happen when we bought our first home... seemed like we worked and worked and jumped through all the hoops only to be told at the last minute we needed more (we eventually decided the mortgage company we used was a piece of work!). It got to the point we thought we'd have to pull back (they wanted $500 more just sitting in our checking account, I don't know why)... we'd wiped out savings, lived at the bare minimum for the last 3 months to have what they wanted in our checking account, only to be told we needed more. My sister, who had just graduated high school, offered to loan us her graduation money so we'd hopefully be able to get the house.

We did eventually close on it, but it was much longer than we'd anticipated in the beginning. I think even the sellers were getting frustrated, but in the end it all worked out for us.

We also recently helped my parents buy their first house, also a foreclosure. They, too, had to jump through so many hoops. Thankfully they had a really good realetor so it eventually worked out for them, too.

As to another person making an offer... if you're dad has already made a contract with the bank (it sounds like he may have since he's been asked to have $1000 good faith deposit), even if the other person does make a better offer, I don't think the bank can back out of your dad's contract unless he doesn't uphold his end of the bargain.

[mayanfire]

I'm just going crazy! My dad called the real estate agent and told him that we have a check for $15,000 and he was depositing it into his bank and would bring the deposit slip...Now the guy is saying that the deposit slip would work for today, but that we'd have to have a bank statement by tomorrow. The check wouldn't clear by tomorrow! So we went to my boyfriends bank and cashed the check, and we wanted to deposit it into my dads account, but apparently that sends a red flag to the irs and the bank president said my dad would get audited. I'm just so frustrated. Everytime we take a step towards the house, it seems like we've really taken several back.

MrsPinecone...So you're mom only needed a portion of the amount? Not the whole thing up front?


We'd be ok with everything if he'd just tell us up from what we have to do. My dad told him he didn't know what he was doing. That he'd never done this before. The bank manager of my bank did say that something didn't sound right. That we should just have to put a deposit down (which we thought the $500, and then the $1000 was), and not have the rest until closing. I just want this house! It has such potential!

[mayanfire]

He's already signed dozens of papers, and the first day he signed papers, the real estate agent said it all looked good, and he was fairly certain they would accept our offer. Then he called back and wanted more money and said that he just didn't know if $15,000 was enough. We are willing to go higher if that's what it takes, but...I just don't know.

I just got off the phone with my dad. If he puts the $15,000 in his business account, it won't cause red flags.

*crossing my fingers*

I can totally understand your frustration! We had a similar thing happen when we bought our first home... seemed like we worked and worked and jumped through all the hoops only to be told at the last minute we needed more (we eventually decided the mortgage company we used was a piece of work!). It got to the point we thought we'd have to pull back (they wanted $500 more just sitting in our checking account, I don't know why)... we'd wiped out savings, lived at the bare minimum for the last 3 months to have what they wanted in our checking account, only to be told we needed more. My sister, who had just graduated high school, offered to loan us her graduation money so we'd hopefully be able to get the house.

We did eventually close on it, but it was much longer than we'd anticipated in the beginning. I think even the sellers were getting frustrated, but in the end it all worked out for us.

We also recently helped my parents buy their first house, also a foreclosure. They, too, had to jump through so many hoops. Thankfully they had a really good realetor so it eventually worked out for them, too.

As to another person making an offer... if you're dad has already made a contract with the bank (it sounds like he may have since he's been asked to have $1000 good faith deposit), even if the other person does make a better offer, I don't think the bank can back out of your dad's contract unless he doesn't uphold his end of the bargain.