House #14: Officially Ours

January 20, 2010 · 4 comments

I won’t go into much detail, but let’s just say it wasn’t pretty trying to get The Pine House purchased. After numerous arguments with the listing agent, threats of lawsuits, threats of keeping earnest money, etc, we finally got this purchase closed today.

Basically, the asset manager for the selling institution (Fannie Mae) knew that we had a large deposit tied up in the property ($40K), and knew that if we tried to back out, they could likely keep that money as damages (the contracts they make buyers sign are ridiculous), so they were happily dragging their feet to the closing table. In fact, we were originally supposed to close on December 18, and if we hadn’t pushed it, it would probably have been another month or two.

Our attorney told us that there was a reasonable chance that we’d lose our deposit if it went to court, but also thought that Fannie Mae probably wouldn’t go through with a lawsuit, so last week, we told the listing agent that they had a week to close, or we were going to back out. Despite the fact that they said they were convinced they could win in court, they created a frenzy with the title company and closing attorney, and literally 3 hours before our deadline, the closing got scheduled for yesterday afternoon. There were a couple errors on the HUD statement, so we ended up having to go back to the closing table this morning, and after another couple hours of dealing with the seller’s crap, we finally got the property closed.

After all the arguments over this closing, I imagine we’ll no longer be able to work with this REO company (a pretty big one) in the future, at least not under our current corporate name. But, if we ever want to buy from them again, we’ll just create a new company and work with another agent to make the offer… 🙂

In the meantime, we’re planning to start rehab later this week or early next week, and while it will be a major project, we hope to be complete by mid-March…

4 responses to “House #14: Officially Ours”

  1. Jingle says:

    J Scott, It happens. I have a major REO realtor in our area who screwed himself, the Bank, (Citi) and most of all me, out of my higher offer because he was mad at me for enforcing a $100 error on a HUD statement on a prior deal. He simply refused to submit my offer, which turns out, was $3500 higher in a last/best situation. I responded by filing a complaint with the Real Estate commission. (Who knows what will happen, but I doubt much) I now use an alternate LLC to deal with this company. My nephew gets a kick out of being a general partner and the % I give him for my $100 past battle…….. Will you reconsider your use of high deposits?


  2. J Scott says:

    Hey Jingle –

    As to your question about whether we’ll reconsider our use of high deposits, we definitely will when it comes to Fannie Mae properties, as their contracts are completely one-sided, and once you’re under contract, there’s no getting out of it (at least not without a lawsuit). So, in the future, when putting Fannie Mae properties under contract, we’ll definitely go a little bit lighter on the earnest money.

  3. Jason,
    I would be willing to step up to the plate and be the 51% partner in a new LLC to help you purchase future properties in exchange for a small percentage of the profit! I just want you to know I got your back and would be willing to take one for the team … for a small fee or all the margaritas I can drink!

  4. J Scott says:

    Hey Jennifer –

    If you were a real estate agent, I might take you up on that. The company name isn’t an issue…we can just use a DBA, and nobody will know it’s our company.

    The bigger issue that they probably wouldn’t want to deal with my wife as the agent on our side…so we’ll have to have another agent put the offer in…

    Between using another agent and using a different company name as the buyer, we should be okay… 🙂

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