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That Troublesome Contract! ..... part two

That Troublesome Contract! ….part two

For part one of this “mini-series” please see: http://reopro.ning.com/profiles/blogs/that-troublesome-contract


As you see from Part One, this all started the week after Christmas, yes...Christmas of 2009. But let me get you up to speed with the latest.


Finally, after weeks of back and forth between the buyer's agent and the bank's asset manager, we come to an agreement on terms. Which were pretty good on paper, key phrase here is “on paper”. The deal was $4000 over list price (no competing offers) so the buyer could get more closing cost paid. The bank normally would not pay more the 3%, but the buyer needed up to 6% to make the deal work according to her lender. Red flag #4 or 5, not sure as I had stopped keeping track by now as we were in the second month of this transaction and still do not have a binding agreement. Almost all the delays were cause by the buyer's agent, having him re-write the offer 7, yes 7 times, before he got it right!


I get the A/M to finally understand what was going on and their net did not change, this only took 3 or 4 emails. The A/M send me the contract back to have the buyers initial off all the changes to the contract before he signs it. WTH? Why didn't he go ahead and sign it? But anyway, I roll with it and send it to the buyer's agent with instructions on what to do. This bank's division does not use addendums, they just mark out what they don't like on the original contract and initial all the changes. I've gotten use to it but some agents get very confused about this. I tell the agent the buyer must initial each and every change or it will be sent back to him. Well, it took 3 attempts to all the initials in the proper places, still not sure if it was the agents fault or the buyer's but I'll blame the agent anyway, he should have known better!


So after 2 more weeks I send the contract back to the A/M for his final signature. Shouldn't take more then a day, two if he's busy...right? Wrong again! Three WEEKS later I get the signed contract back and guess what, now we have got to re-negotiate the closing date as by now we only have 8 days to close a FHA loan. Finally, a closing date is set for April 20.....cool! Or so I thought.


Well, by now the buyer has swapped lenders, another red flag! I called the lender to confirm the approval letter like normal, “no problems” says the lender “we can close by the 20th”. COOL! Or so I thought again. This was early mid-March so I thought they had plenty of time to get this done. Wrong again!


Two weeks before any closing I usually start calling the buyer's lender to see how things were going and if there were any snafu's popping up. Well, when I call the lender his office phone number has been disconnected (red flag # 30 something by now?) but he answers his cell phone. Kids and a TV in the background, he quickly tells me he is swamped and would call me back in 10 minutes. Three days later I call him back, same story...will call you back in 10 minutes. I then call the agent, he says he will talk to the lender and call me back in 10 minutes. LOL, this is starting to become a funny game. Two days later he calls me back and says “no problems, we will close on the 20th”. It was around the 15th, (the closing was the 20th) so I say COOL! (I have got to stop saying this)


On the 20th the agent calls me early in the morning to say there is a problem. No kidding? There has been a problem since the very start! I told him he gets one shot at extending the closing date, talk to the lender and see exactly what the problem was and how long he needs to get this done and closed. That afternoon he calls me to say that the lender told him that the buyer's credit score was 613, that they were working on some credit repairs and would need an additional 21 days. WTH? This “lender” issued a letter of approval knowing that the buyer is not qualified? And I believe the agent knew this all along!


After I calm down and come off the ceiling, I tell this agent that this was unacceptable and that he needed to find a way to get this closed by the end of the week, 7 days max. To send me a closing extension request form before 4pm. Well I get it at 10pm that night.....requesting the 21 days I told him earlier he would not get. Needless to say that the bank rejected the request and I prepared the Termination of Contract and Release of Earnest Money form, sent it to the A/M on April 21 for him to sign, the day after the scheduled closing. COOL, I think to myself, I can get this back on the market in time for the last week or so of the tax rebates. Which did prompt a lot of activity locally.


Well, not so fast there big boy! Even so the A/M said that the bank wanted the earnest money ASAP because the buyer failed to close, and I sent the form to the A/M last month for him to sign and send back, I'm still waiting. The contract is still active and I cannot put it back on the market because in Georgia, contracts do not automaticly expire if not closed. It MUST be terminated in writing, no if's, and's or but's. This was explained to the A/M when I sent him the form.


I inquired again this past week with the A/M, as now I'm getting nasty letters from our business office wanting the paperwork or threatening to fine me. Again the A/M says that the contract has expired because it did not close, to send him the E/M ASAP. Now I can understand that keeping up with contract laws in multiple states can be overwhelming and hard to do, no problems. He tells me that other agents in my state do not require this form, why am I?


Because it's Georgia contract law and these other agents are wrong, not to mention breaking the law. I was only trying to protect them from any future legal liability. He did not believe me and requested documentation on this, so I found an article written by the very attorney who writes the contract forms for the Ga. Assoc. of Realtors (GAR) that states exactly what I have been telling him. Still not good enough and they call one of the partners in the mega law firm that handles all of their closing services.


That was Thursday, I'm still waiting for a one page form needing one signature and fax/emailed back to me and I'll take care of the rest.


I'm starting to think this house is jinxed! This is the third contract that has failed to close, I've had to fire a team member over it (that's for a whole other blog there), and now I expect to be fired by the bank because I refused to break contract law. Not to mention that I'm about to get a $50 fine for not turning in paperwork that the A/M has refused to sign.


I'm hoping that Part Three is a much shorter story to write!



Steve Adkins – REALTOR®

Better Homes and Gardens Real Estate Metro Brokers

404-843-2500

Hiram Office

www.The-Adkins-Group.com

Views: 12

Tags: adkins, and, better, brokers, estate, gardens, homes, metro, real, steve, More…www.the-adkins-group.com

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Comment by Steve Adkins on May 18, 2010 at 6:04pm
Well, I finally got the T&R form signed today by the asset manager.....4 weeks after I sent it to him. It took an act of congress, and one of my brokers to get him to finally sign it. I still do not know why he had such an issue with signing it. And may have burned that bridge in the process, still don't know if I will loose any future business from him.

Anyway, I emailed and tried to fax the form to the buyer's agent for signatures by the buyer. But the fax number on the agents business card belongs to another agent's HOME fax line, who calls me wanting to know why I was sending this to him. Turns out I had worked with this same agent on another deal in this same subdivision. At least he knew the correct fax number to their main office. Only took three attempts, lol.

I then call the agent, go figure that my call ends up in his voice mail. But he does call me back a few minutes later...twice while I was on the phone with the property manager. Finally I get to the agent, kids yelling and TV blaring in the background, I expected nothing less I guess. He is baffled as to why the back is doing this! That he has ANOTHER lender working on this deal and he wants until Friday. WTH? Not no but HELL NO!

Then he ask me what he should do if they can get approval. What? No, I'm not his broker. He doesn't even work at my brokerage. I tell him to talk to his broker, but his ONLY option is to come back later with a new offer, if and only if it's fully approved and ready to close! Hopefully by then the listing has been re-assigned!

So now I wonder how long it will take to get the form back (hopefully signed in the proper spots) from the agent with out him having to run home (in another COUNTRY) due to another emergency. This has already happened once before!

I just hope no one try's to take my blood pressure this week, it may blow the gauge!
Comment by Steve Adkins on May 18, 2010 at 9:33am
Part three is developing now, the last 24 hours has been interesting to say the least. More coming soon. :(
Comment by Monica Dehnert on May 18, 2010 at 7:36am
Steve, your humor is appreciated. The situation is not funny, however; the way you describe the circumstances bring up our own memories of dealing with inept mortgage brokers, buyer agents and team members. Thanks for your blog.
Comment by Steve Adkins on May 17, 2010 at 9:37am
Some days I don't know if I want to scream or laugh!

Last year I presented a "check list" for making offers, the bank refused to allow me to use it as they said it would scare off potential buyers. Sometimes you need to scare off buyers like this one!

And yes, we have had title issues here also. Lucky for me my listings were not pulled, but the first batch of listings (that we missed) were, after most were already sold. The next batch is tied up in court, trying to get all these issued cleared ahead of time. They are learning!
Comment by Tony Linton on May 17, 2010 at 7:40am
I feel for you on this one Steve, I went back and read part one as well. Deals like this are frustrating and can also hurt future properties even if the asset mgr is aware of all factors. It seems to me that you put a lot of effort into making sure all parties were on track....then they basically stuck it to you! My AM's are at the point that they won't accept any USDA or 1st time home buyers offers without a strong FHA as the primary financing and never more than 3% seller concessions.

If it makes you feel any better I have had a few myself this year that despite my efforts have gone South in a big way, only one due to a sloppy Mtg Broker.

Most of my issues are sneaking in the back door and are out of my control....even out of the buyer's agents control. Many title problems are happening down here in Florida.

Three properties have been delayed closing due to improper vesting or incorrect POA from the selling lender which result in a bad deed.

One property was taken from me on the day of closing because the foreclosing attorney missed a $32,000 judgement lien and the bank had to put it back through foreclosure, I don't know if I will get this one back. The worst part of this one is that one of my agents was on the selling side and the property had a $1500 bonus.

City leins are a BIG problem as well, I have a property right now that should have closed 2 weeks ago but has a two year old city grass cutting lien for $10,000 that has to be negotiated. This was not one of my properties but I had the buyer (just means I get the full 3% plus a $1500 bonus) It will close but a month or so late.

Feel better? It’s not just you…lol. But you just gotta love this business!!!
Comment by Kimmie Hauver on May 16, 2010 at 3:08pm
WOW! That is crazy...I think you might be onto something thinking the house is jinxed!

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