Home Buying – It Ain’t Over Until The Fat Lady Signs Comments54 Comments

First of all, don’t take offense to the ‘fat lady’ reference. I have no problem with overweight people, but once you hear what this condo seller did to us, you’d be calling her names too.

As many of you know my girlfriend and I were in the process of buying our very first condo. Everything was going extremely smoothly. In hindsight I probably should have been apprehensive about that smooth sailing. Something was bound to go wrong and in the worst possible way.

So pretty much everything was complete…confidence building home inspection – check, accepted offer – check, negotiated mortgage – check, moving van rental secured for 2 days – check, home owner’s insurance arranged – check, final papers signed with a notary – check. Final papers signed by the seller…not so much.

As we were getting closer and closer to moving in, excitement was really setting in. Maybe we were planning too much and counting our chickens before they were hatched. Can you blame us when everything seemed finalized to us?

Then on May 29th we find out that the seller was unable to get her bank to discharge her mortgage. After owning the condo for years she somehow owed more on the condo that she agreed to sell it for. My theory is that she funded her recent divorce with the equity in her home. She claimed to be unable to secure a loan to cover the difference. Umm…why the hell are we finding this out days before we were set to move in?? Why the hell did she accept an offer that she should’ve known was lower than what she owed??

Now in the US this may be a more common scenario since the housing collapse. Here in Canada, especially Vancouver, this just doesn’t happen. With housing prices around here constantly increasing, it’s very unlikely for someone to owe more on the mortgage than they can sell for. When someone has had that mortgage for years, it is even more unlikely. Her bank happens to have a mortgage plan that instantly gives you access to all of your home equity at any time. I know because my planned mortgage was with the same bank and had the same setup.

So imagine the feeling of having the rug ripped out from under you just a few days before you were to take ownership of your first home. Saying it was a whirlwind of emotion would be an understatement. First we were trying to hold out hope that she would come up with the money before the actual closing date. When the closing date came with no positive news, we were both so pissed off. This lady’s stupidity was seriously screwing us over. Then came the sadness when we had to accept that we weren’t getting the condo. As our realtor suggested different strategies to force the sale through, this whole whirlwind repeated itself.

To make matters worse, the seller was being very unresponsive with her realtor. Everyone was just left in the dark about what was going on. On the closing date, her realtor even tried to track her down at her job to try to get some kind of answer. Couldn’t she at least have the decency to be more upfront and admit her mistake?

During this whole ordeal we just couldn’t wrap our heads around how this could happen. Giving her the benefit of the doubt that she wasn’t straight up heartless, we could only assume that she was just naive and stupid. Was it that simple though? In the back of our minds we got wondering if there was something more to it. Could she maybe be wanting us to sue her so that she could go bankrupt and get out from under her mortgage? Or did she have a messy divorce making her want to ruin her ex-husband who was still the guarantor on her mortgage? Did someone tell her that she sold for too low and could get a lot more if she did renovations or waited it out? Knowing she still moved out at the end of the month just added to the suspicion.

Most likely we’ll never find out what the truth was. I’d love to sue her ass to get back every penny spent and to get compensation for the wasted time. In reality though, it would be far too expensive and there would still be the possibility of her filing for bankruptcy. Because the bank technically owns the condo, we might not be able to get ownership via the courts either. We do fully intend to take her to small claims court where we can recoup some costs without lawyer fees.

Another frustrating part about this all is that it nearly left us temporarily homeless. We had already given notice to move out of our rental apartment with someone else scheduled to move in. So as the deadline was nearing on the closing date, we had no choice but to scramble to secure a backup plan. Technically we could’ve stayed at a hotel and sued the seller for that expense, but why risk it when we might never recover the money. Fortunately we were able to find a rental apartment that allows 2 cats and would let us move in the very next day. At least that was a relief.

Really I should be more bitter about this whole mess, but we’re trying to stay positive. On the bright side, there were some things that were less than ideal with that condo. Also we had never lived in that suburb. So this is our chance to rent there to see if we could live there long term.

A big part of me is still pretty damn pissed off though. I had to bite my tongue not to make this post a big swear-fest. Sure it might not have been the ideal condo, yet we wasted so much time, energy and money pursuing it. We might get the money back, but the time is gone forever and now we have to go through it all over again now. Plus there is more work to undo everything that we did complete. With any luck we’ve learned some things to make it go smoother. Luck sure doesn’t seem to be on our side these days though.

What do you think the seller’s story really is in this situation? Have any of you had to deal with something like this? Would you still be tempted to take her to court for breach of contract?

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This entry was posted in Real Estate, and tagged , Comments54 Comments
By : Jeremy Biberdorf | 7 Jun 2013
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54 thoughts on “Home Buying – It Ain’t Over Until The Fat Lady Signs

  1. Thomas | Your Daily Finance

    I cant say what I want to about the seller. May have younger readers. Lets just say I called her some names already. I think she knew what was going on and just was hoping the bank would let her slide. But wouldn’t or shouldn’t the realtor ask if she owed anything and find out the balance for sure? Think goodness your were able to get that apartment. Trying to sue would have been a waste of time and money.

    Reply
    1. Jeremy

      Yeah that might very well be the case. If she stops making payments and the bank has to foreclose, the bank would end up losing out. So if the bank really knew her intentions they might’ve taken a different approach. As for calling her names, let it fly. I don’t think I’m big on the pre-teen demographic lol.

      Reply
  2. Jordann @ My Alternate Life

    That’s a pretty crazy story, I still can’t quite believe she would do that to you. I hope you’re able to recover some of your costs, I completely understand that you just want to move on from this bad experience.

    Reply
    1. Jeremy

      I hope we can too. It’s looking like I’m going to have to go talk to a lawyer this week to get the ball rolling. The deposit is now held up since that nutcase won’t sign off on it.

      Reply
  3. Christine

    Wow. I’m not sure how things work there but if there is a way to hold her responsible for her actions I would be very temped to do it! When we bought our house we went back and forth with the owners for weeks about whether or not they were going to repair the severely damaged roof. I finally told me real estate agent “Tell them to replace the roof or we’re NOT buying the house.” They finally replaced it. There was even more drama at closing time but if I wrote it all this comment would be three pages long! LOL. I hope everything works out and you find a new condo soon!

    Reply
    1. Jeremy

      Yes she is definitely liable since she clearly breached our contract. It’s just a question of whether we can actually get the money back now. That is bound to be a fight. That sucks about your buying experience, but at least it was taken care of in the end. When you buy a home here you can put in sale conditions like that for the sale to go through.

      Reply
  4. Brian

    Sorry to hear that, man. Its kind of baffling as to what the seller was thinking and you’ll probably never know. That is super lucky you were able to find a place to rent on short notice. I’m sure You guys will be taking it easy for a bit before looking for another place!

    Reply
    1. Jeremy

      Perhaps we will find out more in small claims court. And yeah we won’t be rushing into finding another place right away. As much as we want to be homeowners, I don’t want to move again and do the whole home buying process all over again yet.

      Reply
  5. John S @ Frugal Rules

    I read about this on GMD’s site and to say it sucks is putting it lightly. I can’t write out what I’d say, but I would be ticked just like you…especially with how unresponsive the lady was and how she left you guys in the dark. The closest thing to this we’ve ever experienced was a landlord refusing to pay back our deposit even though the place was left in great condition. We had to sue her, which she did not show up, but we were able to eventually get our money back.

    Reply
    1. Jeremy

      Yes being in the dark was one of the worst parts of the situation. If she had been more upfront about her situation we might not have even made an offer or we could at least have made backup plans earlier. I hope I don’t have to sue my previous landlord on top of this as I’m still waiting on my damage deposit.

      Reply
  6. Ree Klein

    Wow, that must have been exhausting, draining, maddening…enough to scare you off from ever tying to buy a place again. I wonder if, as a condition of the offer, you can ask for a recent mortgage statement from the seller. If the seller accepts the offer, they must provide proof of the unpaid balance before moving forward.

    Sounds like your situation is a once-in-a-million chance in Canada, but here in the US I bet it isn’t rare.

    I’m sorry you had such a bad experience, but I bet the next place that interests you will be a far better place to live!

    Reply
    1. Jeremy

      Knowing how rare it was makes it easier for us to start looking at other places to buy. Everyone we talked to had never heard of something like this happening. I am a bit skeptical about her actual banking situation. She could’ve just said that and we wouldn’t even know. Then she could try to sell for more later. We are considering putting a lien on the condo to prevent that.

      Reply
  7. Catherine

    I feel so bad for you guys. What a dumb lady. I hope you guys find something even better and I believe in Karma so believe she will get what she deserves!

    Reply
    1. Jeremy

      She definitely has some bad karma coming her way. I’m not really sure that she even knows what she put us through. She seems to only care about herself.

      Reply
  8. Grayson @ Debt Roundup

    I would be taking that seller to court in a heartbeat, but just small claims as you are. You probably won’t get the money from her anyway, but at least small claims doesn’t cost much if anything. I am sorry to hear about this situation Jeremy and I hope you move on to find a better condo.

    Reply
    1. Jeremy

      Yeah getting the money in the end is questionable. It might not cost much, but wasting extra time and energy on this is frustrating. I just wish I could get the money back asap and move on.

      Reply
  9. Kendal @HassleFreeSaver

    I was so sorry to hear about this situation when I read about it on GMD. I can only imagine how heartbreaking it was to realize the home you’d been waiting for wasn’t going to happen, but the issue with the seller really makes it worse. I hope the outcome from small claims court is a positive end to a very negative situation. As much as it sucks, you’ll likely be very cautious about these types of transactions in the future, so at least you know you’ll never have to go through it again. Hang in there (both of you!).

    Reply
    1. Jeremy

      Thanks Kendal. I’d like to think we’d be wary but I’m not sure how we could’ve avoided the situation. Maybe once we found out that she had divorced recently we would ask a lot more questions. Her realtor was pretty dishonest about that side of things though. She claimed that the ex-husband wasn’t in the picture at all, yet he was still her guarantor.

      Reply
    1. Jeremy

      I think we’re over the attachment part, but it was tough to accept that everything we had planned was all down the drain. We really had it in our heads how our life would be.

      Reply
  10. Pauline

    So sorry about that, it really sucks. I have no idea what the law says in this case, but have had the opposite with a buyer going MIA and I know how stressful it can be. Hope you guys find a nice home really soon.

    Reply
    1. Jeremy

      I’m pretty sure the law is that we can get her to cover the expenses that we spent on the assumption the deal would go through. Her financial situation kinda makes that not so guaranteed. I have heard that as the seller you can go after the potential buyer for damages too.

      Reply
  11. Debt Blag

    Can’t say enough how sorry I am to hear that this happened to you guys. I’d be suspicious of her, but I can’t really think up what she might gain by accepting an offer that would be too low. None of it makes sense because if anything, she’d be better off just walking away.

    Reply
    1. Jeremy

      There are 2 main theories I have. One is that she just didn’t realize that the bank wouldn’t discharge the mortgage. The other is that she found out that she could sell for a lot higher if she did renovations. Either way it’s bullshit.

      Reply
  12. Canadian Budget Binder

    Wow, sorry about that Jeremy and no I’ve never had to deal with this before. I’m happy to hear that you sorted your end out but you are still out all the time and cash because of all of this. There should be more protection in these proceedings. I hope you find a better place mate..

    Reply
    1. Jeremy

      I do wonder if there is better protection in the US since this would be a more common situation. We technically aren’t completely done with everything on our end. There is still the actual legal battle now. I think that should be quick though since it’s an open and shut case.

      Reply
  13. Alex @ Searching for Happy

    Yikes. I’m sorry to hear you’re out the time and cash with nothing to show for it. It’s hard to understand what the woman might be thinking.

    Whichever path you choose, I hope you get an amazing deal on your next choice to balance out this bad one!

    Reply
    1. Jeremy

      Not only do we have nothing to show for it, but we had to move into a different rental for no fault of our own. With any luck we’ll recover the money spent, but that is a bit of a coin flip.

      Reply
  14. #Broke Millennial

    After getting the bits and pieces via Twitter and GMD it’s amazing to read this account. I can’t even imagine the frustration you two were going through. I hope you and recoup some of the financial losses in small claims court, but losing all that time is just so frustrating.

    I’ve never tried to buy property, but had a rough time trying to get my first NYC apartment. As a recent college grad with a low-paying job I had to have a guarantor. So many landlords were insisting only my father’s name be on the lease and because he didn’t know my roommate, didn’t live in New York State and he didn’t want to be solely liable for the apartment. Plus, it didn’t give me any legal rights if something went wrong.

    I had put a deposit down on a place and they backed out because they refused to let us have multiple names on a lease. We ended up finding our apartment 2 days before my temporary living situation ended.

    Still, nothing on what you two went through. I hope the next place is way better and makes you so grateful you didn’t end up with the first one.

    Reply
    1. Jeremy

      I can’t get over how much time we put into this failed purchase too. You expect that after putting all of that time and energy in that it will be all worth it when you take possession of your new home. Instead all we got was a big waste of time and money and a flood of emotions. I hope the next place is even better to make up for it. Sounds like we had a bit of the same situation with how you didn’t find a place to live until 2 days before your deadline.

      Reply
  15. Kim@Eyesonthedollar

    When we closed on our first house, the lender had some sort of issue at the last minute and we had to stay in a motel for a week. The worst part was that we could see our house, sitting empty, from the motel, but we did eventually get to close. I can’t imaging being all set and then nothing. I hope the next place you find is even better. Surely you are due some good house buying karma.

    Reply
    1. Jeremy

      That would be a little weird to be able to see your new home but to be stuck waiting. We do see the condo we were supposed to buy fairly often since the train to work is close to it. I just try to avoid looking at it to hold back the bitterness.

      Reply
  16. Laurie @thefrugalfarmer

    Oh no!!!!! That’s just terrible! What the h___ was she thinking? Regardless of her situation, she should’ve at least had the compassion to not want you guys to be stuck homeless. She knew about the situation and could’ve said something earlier so that you guys would not be left scrambling for a home. That being said, it’s probably a good thing in hindsight. You’ll likely find a place you like much better.

    Reply
    1. Jeremy

      Maybe it was meant to be this way so that we take our time and find a place that is better. There were some downsides with that condo that we were going to have to put up with. I think her being ignorant is the logical reason why she wouldn’t tell us sooner, but I don’t trust her at all.

      Reply
  17. Adam @ Money Rebound

    Sorry to hear this mate. I don’t think I’d be taking them to court over it (maybe small claims as you said), probably too much time and expense involved with no real guarantee of a positive outcome. Glad you managed to find somewhere else to live in the meantime and I’m sure you’ll look back when you do eventually buy a place and realise things worked out for the best after all.

    Reply
    1. Jeremy

      Even without the guarantee I sure want to take her down. She screwed us over due her own stupidity or greed. I really don’t want to let her get away with it scot-free. At the very least she should be paying our expenses.

      Reply
    1. Jeremy

      That’s what we’re trying to think. Rather than focus on what we missed out on, we focus on the negatives of that condo and how we are glad to not get it.

      Reply
  18. Christine @ ThePursuitofGreen

    This is a house buying horror story for sure. Sorry you had to go through all that! I can’t even imagine what that lady was thinking it all! Sometimes people don’t act rationally at all and then try to run from their mistakes. Hopefully you get back your money, and the next place you want to be will be awesomer than this one!

    Reply
    1. Jeremy

      She does seem to be running from her mistakes. She might be just trying to get the condo foreclosed or she might be renovating it to try to sell it for more. Either way, she thinks she can just hide from the initial deal and it’ll all go away.

      Reply
  19. KK @ Student Debt Survivor

    Been following this mess over at GMD. My heart is broken for your guys. That lady is a real idiot (and that’s the nicest and most appropriate thing I can say about her in a public forum). I don’t usually believe in suing people, but in this case, sue away!

    Reply
    1. Jeremy

      I was struggling for how to refer to her in the post and in the comments. I don’t want to come off as rude and foul mouthed though. Suing normally would be something I’d avoid too, but she’s really giving us little choice.

      Reply
  20. Ashley Park

    What an absolute nightmare! I had a similar problem when I was buying my first home, the seller wanted to buy land to build their own home but couldn’t find a suitable piece of land. We got a phone call a few weeks before we were due to move in and were just told that everything was on hold for an indefinite amount of time. We waited 6 months with no news and ended up pulling out of the sale. Hopefully it will all come together and you will find and even better condo than you were originally buying.

    Reply
    1. Jeremy

      That sounds like another pretty irresponsible and inconsiderate seller. They should’ve held up their end of the deal and found somewhere to stay until they found their land to build on. At least you had a few weeks to figure things out and not just a few days.

      Reply
  21. Evan

    Really? Does this happen in real life not only in movies? I’m seriously chocked, tell the truth.. Sorry for such bad experience but experience is also experiencing. Cheer up!

    Reply
    1. Jeremy

      It does all feel a bit surreal. With everything going smoothly there is no way we expected the deal to fall through. We had already counted all the chickens, given them names and bought extra chicken feed. Unfortunately someone wanted scrambled eggs instead.

      Reply
  22. Mr. 1500

    The whole situation is a bit crazy. We’ve messed around a lot with real estate and I’ve never heard of anything like this happening. She sounds completely incompetent as does her realtor. If you owe XXX on a home, you have to sell it for enough to pay back the bank. Maybe she thought that the bank would give her a modification?

    Who knows. It’s a futile exercise to spend too much time thinking about it. Learn from the past, but steer the ship (or Mustang) towards the future.

    Reply
    1. Jeremy

      Yep, it was the perfect storm….a complete idiot for a seller and a newbie realtor who didn’t know any better either. I think you’re right about her assumption. She probably did think that the bank would just accept the sale price and transfer the balance to a loan. The problem there was that she had her exhusband as the guarantor on the mortgage. So her own credit was too weak for the option.

      Reply
  23. TK

    Oh boy, temporary homelessness is terrible. It’s a good thing you don’t have kids (or do you?!?)… But yeah, that seller was horrible… I’m sorry about that!

    Reply
    1. Jeremy

      Oh if we had kids involved in all of this I would be even more furious. The only ‘kids’ we have are 2 cats. I hate putting them through an extra move too.

      Reply
  24. Frank @ RLD Investments

    That’s a horrible situation to be in, I feel for you. Unfortunately your case just illustrates how people are irresponsible with their finances, how else could you explain her not knowing all that. Hopefully people reading this will use it as a lesson learned without having to go through it ourselves.

    Reply
    1. Simon

      Indeed, there is nuggets of financial wisdom to be gleaned from the unfortunate story and hope people can learn something and avoid falling into the same pitfalls.

      Reply
  25. Patti

    What a difficult situation for you! So sorry you had to go through all that stress. I hope you’ve been able to move on to a much better home purchase by now.

    One thought that I had while reading this was whether you had tried to recover any damages from the listing realtor? Here in the US, the listing realtor has legal responsibilities for the validity of a property listing and representation. I can’t imagine a competent realtor not checking basic facts, such as the mortgage balance on a property.

    If possible, I’d draw up a list of your damages and present it to the listing real estate agency. They may be willing to settle just out of goodwill even if they are not legally responsible.

    Reply
    1. Jeremy

      Yes she definitely was an incompetent real estate agent. I had talked to a Canadian lawyer and he told me that we never had any kind of contract with the seller’s listing agent. So I think we were out of luck there. The other problem is that with the amount of damages, it’s at a point that it may be too low be bother pursuing considering how much time and money it would cost.

      Reply

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