Put non contingent offer - closing jitters

Put non contingent offer - closing jitters

SF · Member since 2014 · 18 posts · 4 votes

Our Agent knew we were beat up buyers since we lost 3 homes prior and switched agents..The agent influenced us to go non contingent offer waiving everything… if we wanted to win the house. We went with highest offer got a counter asking $20k more and reluctantly signed. We really stretched ourselves thin. 

we did not perform our own inspections because we were busy raising finances .. and our agent insisted we use the same company who did the initial inspections to “get a report in our name” .. we went for visual inspection with our agent and found the master bathtub was  upside down — they said there was a chip and seller was fixing the tub. Our agent was rushing us because she said she had an appointment. But when we found the issues she decided to stay back. 
 

This raised some doubt and we communicated to our agent that we are not satisfied but she kept insisting “there’s nothing you can do” and “you went non contingent” 

Then later she sent an email saying we passed the 17 day inspection period which we didn’t know about.


I asked I want to arrange my own inspection and she said .. “what are you going to find?” And there’s “nothing you can do you went non contingent” .. and she veb said “you can do all the inspections you want after you close and move in” 

She insisted we either “get a report in our name” from the same inspection company or “call the plumber who fixed the leaks prior” 

Now 2 days prior to closing agent sent us a disclosure saying we waive all inspection rights - home inspection waiver , wood destroying pest waiver etc. 

we felt remorse of overpaying in first place and we are not sure if we are making a mistake closing this home with the whole inspection thing. The home has been sold 4 times prior built in 2003.

What should we do at this point? Earnest money is likely not going to be refunded if we back out now.

0Reply
103 views

Most Popular Reply

Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes
2y

@Account Closed it sounds like you're making a big mistake and you used a very shady agent (unfortunately it is common in this industry. I am an agent as well and seen too many terrible things haha). 

Are you really sure you have no way out of this contract? If you are getting it financed, you could ask that the bank decide to pull out of financing it. Otherwise, it may be worth losing the security deposit if the house is in really bad condition. 

See this reply in the discussion

15 Replies

Jump to latestLatest
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y

    I'm unclear what you mean by upside down bathtub?

  • Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes
    2y

    @Account Closed it sounds like you're making a big mistake and you used a very shady agent (unfortunately it is common in this industry. I am an agent as well and seen too many terrible things haha). 

    Are you really sure you have no way out of this contract? If you are getting it financed, you could ask that the bank decide to pull out of financing it. Otherwise, it may be worth losing the security deposit if the house is in really bad condition. 

  • Real Estate Agent · Memphis, TN · Member since 2015 · 152 posts · 132 votes
    2y

    I agree with Ray.  It looks like the agent is forcing your hand at this point.  It may be worth it for you to lose the earnest money and seek out another property and another agent. Stay away from zero contingencies and get an inspection to protect yourself.  Also inspections can be used as leverage to get a lower price on the home if there are a lot of issues.  I know you hate losing earnest money, but imagine closing and finding a lot of expensive repairs on this house.  

  • SF · Member since 2014 · 18 posts · 4 votes
    2y
    Quote from @Ray Hage:

    @Account Closed it sounds like you're making a big mistake and you used a very shady agent (unfortunately it is common in this industry. I am an agent as well and seen too many terrible things haha). 

    Are you really sure you have no way out of this contract? If you are getting it financed, you could ask that the bank decide to pull out of financing it. Otherwise, it may be worth losing the security deposit if the house is in really bad condition. 


    It’s  not in a visually bad condition - foundations etc are good based on the report - just hasn’t been maintained too well - it’s a large custom home built in 2003 and single story and the agent kept persuading us it’s worth that much. So we bought into the idea that it’s a great investment. 
    we went non contingent over asking but just not happy with the way the deal went .. reluctance of our agent to spend time on the property  and when we went for inspection with sellers inspector the seller agent was present and that didn’t give us room to ask questions and really inspect and feel the property to our liking… I am not sure if it’s just a feeling that goes away or will this be a terrible mistake .. 

    earnest money is also a very large sum

  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Account Closed

    where is it, what is purchase price, what's your plan for it?

    can you hire an attorney to review your contract?

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    2y

    If you don’t feel right you just bail and lose your earnest deposit, dine deal. 

    I ASSUME you are not paying cash. That means you’re getting a loan that will require an appraisal. That means the bank will either say “We agree, it’s worth $20k over original asking price. Go ahead.” In which case you can feel good about it. Or they will say no, it’s not worth that, we won’t lend you the rest. So you’ll be out of the deal unless the seller lowers the price.  

    You should have an appraisal by now. Did it come back ok? Ask your lender. 

  • Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes
    2y
    Quote from @Account Closed:
    Quote from @Ray Hage:

    @Account Closed it sounds like you're making a big mistake and you used a very shady agent (unfortunately it is common in this industry. I am an agent as well and seen too many terrible things haha). 

    Are you really sure you have no way out of this contract? If you are getting it financed, you could ask that the bank decide to pull out of financing it. Otherwise, it may be worth losing the security deposit if the house is in really bad condition. 


    It’s  not in a visually bad condition - foundations etc are good based on the report - just hasn’t been maintained too well - it’s a large custom home built in 2003 and single story and the agent kept persuading us it’s worth that much. So we bought into the idea that it’s a great investment. 
    we went non contingent over asking but just not happy with the way the deal went .. reluctance of our agent to spend time on the property  and when we went for inspection with sellers inspector the seller agent was present and that didn’t give us room to ask questions and really inspect and feel the property to our liking… I am not sure if it’s just a feeling that goes away or will this be a terrible mistake .. 

    earnest money is also a very large sum

    Yea it sounds like they lied and pressured you a lot. That's why you feel uneasy about it. If it makes you feel any better, I have had some uneasy feelings about properties I bought but I am very thankful now that I moved ahead. However, I wasn't pressured or lied to about these properties. If you are purchasing in cash, you need to basically do the calculations if it is worth it walk out now and lose the deposit or take the house as is and fix up what is needed. Will it be fairly easy to sell later? (High demand for similar homes in this area?)
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2y

    It is not clear to me what contingencies you removed.  Did you remove finance contingency?   Also if you removed the contingencies, what was the 17 days for.  In my market, if I do not remove contingencies or change the standard agreement I have 17 days to pull out for whatever reason I desire.   But if I remove all contingencies, I loose my earnest deposit (ED) if I pull out for any reason. 

    I recommend you start by finding out what contingencies you removed.   Ideally you did not remove the finance contingency and the lender appraisal will prevent you from significantly over paying for the property. 

    I suspect you have already learned your lesson about removing contingencies but I will state this anyways.   Removal of contingencies are best for experienced RE investors only.  Contingency removal comes with risks.  You should not pay full retail and be removing contingencies.  

    I recommend you get an independent inspection.  Note even without any contingencies you have a little room for negotiation as you can walk and lose ED but it is a pain for the seller.   If you have inspection you can decide to walk losing ED if big issues are found or you can use your inspection to try to get a discount even with no contingencies.  Note do not do this for little items, reserve it for large expense items.   Notify the seller of any large issues you find so that it must be disclosed to subsequent buyers which could reduce subsequent sell price and would provide some incentive for the seller to meet you somewhere in the middle. 

    Note you are an adult.  Claiming pressure, ignorance, pretty much anything does not go far with me.   Short of agent committing fraud, you are responsible.  

    Good luck

  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    2y

    Your agent is a jerk. Regardless of what else you do, make sure she gets a bad social media review. I hate it when an agent gives all Realtors a bad name, but it is too common....

    I agree with those that are saying to check your actual contract - which contingencies did you pass on? And since you paid over retail, you may not get your appraisal number and this goes away. (Unless you waived that as well?)

    Maybe to make you feel better, hire a good GC and have them do a walk-through with you. IF they say everything is looking at least ok, then you'll feel better. And if they see a huge red flag, then you'll feel ok about ditching the deal.

    And don't do this again, waiving contingincies is for pros. And even then you'll get bit (ask me how I know...:-) 

  • Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    2y

    Why were you at an inspection with the seller's inspector and the listing agent? That's odd especially because if you have no inspection contingency (rare and not usually recommended) then typically there wouldn't be an inspection at all in that scenario, unless there is an agreement that it’s for informational purposes only.

    Paying over ask and still having to waive inspection is rough. We saw this happening a little bit a few years ago when many properties were getting multiple offers, but the market has been cooling rapidly to more of a buyers market lately (in my location at least YMMV).

    I try to either get at least one of these: price or terms. “Their price, our terms, or our price, their terms”. I’ve bought properties with no contingencies before but only at a steeply discounted price, and only because I was planning to fully rehab them anyway. 

    It doesn’t sound like you have anything left to negotiate on this one if truly you have no contingencies. All you can do is threaten to back out, and ask for something of the seller to keep you from doing so. If they're motivated to close the deal, they may come to the table. But if the EM is high and they have a backup buyer, they might just say no, keep your EM and sell to their backup. 

    As long as you’re not planning to flip it and hold it a few years, I wouldn’t worry about it too much. Time solves most mistakes in real estate, especially if it’s a good location. Just negotiate better next time and don’t let your agent make decisions for you. They work for you. If you're uncomfortable with your agent, you can ask their broker if you can work with a different agent for the rest of the transaction. Next time work with an agent who is a better fit and think things through more before making an offer with no contingencies. Good luck! 

  • Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    2y

    From an agent perspective, an inspection contingency or not and deadlines are usually clearly stated in the contract, to be reviewed before you sign, and you should have a copy for reference. From your statements, it sounds like you actually had an inspection and were present at it. If you understood you were waiving contingencies, using seller's inspector (assuming licensed inspection company), and providing a large earnest money deposit that you could lose if you backed out, then how is it the agent's fault that you agreed to that process? Whether or not seller's agent was present at your home inspection, it sounds like you attended and had every right and opportunity to ask the inspector any questions you wanted to and crawl all over that property then. How is it your agent's fault that you didn't participate as fully as you wanted to in hindsight? Some of your statements just don't add up to an agent not performing as you expected, actually helping you win a bid in an obviously competitive market where you'd lost several already. It even appears she had you offer less to begin with -- you said seller countered 20K higher, and then you agreed to counter vs lose yet another home. So she wasn't even initially that aggressive with pricing, but appears she guided you with terms that got the seller to come to you first before accepting someone else. It sounds to me like you were frustrated by losing bids, gave her more open parameters, agreed to them in the contract, but now trying to blame your agent when you're having second thoughts.  If you'd have lost that offer, would you now be blaming her for that, too?         

  • Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    If the property is in California and she is saying that you did have an inspection contingency, then you have to actively release it, which means you have an opportunity to bail out today. It isn't typically automatically released like it is in other states.

    In parts of the Bay Area, people are coming in over asking with no contingencies, unfortunately that is becoming common. It isn't common here in Southern California (not to say I haven't seen it as I closed one this year like this). 

    Now, because there is two sides to every story, you do have to take some personal accountability. The agent told you in order to get the property you need to pay $20K over list with no contingencies. That was a choice that only you can make. She couldn't force you to sign the offer.

    The question is how was all of this presented? If the agent was as aggressive as what you are saying, then yes, I would agree with everyone, that the agent probably deserves a bad review. But if the agent explained everything to you, including showing comps, making sure you understand the risks, etc., then it could be a different story.

    There are a lot of bad agents out there, but there are also a lot of good ones. When emotions run high, it is important to take a step back and see everything on a high level.

  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    2y
    Quote from @Account Closed:

    Our Agent knew we were beat up buyers since we lost 3 homes prior and switched agents..The agent influenced us to go non contingent offer waiving everything… if we wanted to win the house. We went with highest offer got a counter asking $20k more and reluctantly signed. We really stretched ourselves thin. 

    we did not perform our own inspections because we were busy raising finances .. and our agent insisted we use the same company who did the initial inspections to “get a report in our name” .. we went for visual inspection with our agent and found the master bathtub was  upside down — they said there was a chip and seller was fixing the tub. Our agent was rushing us because she said she had an appointment. But when we found the issues she decided to stay back. 
     

    This raised some doubt and we communicated to our agent that we are not satisfied but she kept insisting “there’s nothing you can do” and “you went non contingent” 

    Then later she sent an email saying we passed the 17 day inspection period which we didn’t know about.


    I asked I want to arrange my own inspection and she said .. “what are you going to find?” And there’s “nothing you can do you went non contingent” .. and she veb said “you can do all the inspections you want after you close and move in” 

    She insisted we either “get a report in our name” from the same inspection company or “call the plumber who fixed the leaks prior” 

    Now 2 days prior to closing agent sent us a disclosure saying we waive all inspection rights - home inspection waiver , wood destroying pest waiver etc. 

    we felt remorse of overpaying in first place and we are not sure if we are making a mistake closing this home with the whole inspection thing. The home has been sold 4 times prior built in 2003.

    What should we do at this point? Earnest money is likely not going to be refunded if we back out now.


    It may be too late for you to do what I'm going to recommend. For most sales you are allowed a final walk-through prior to closing. The expectation of a final walk though is to make sure that nothing has changed from the time the contract was accepted. If anything in the property has changed you may have grounds to cancel the deal and receive your EMD back. Even if the property is being purchased AS-IS. AS-IS to us means as of the day we saw it and made an offer. If there are significant changes between the time we saw it and closing then it's a different property. When we exercise this option thinking that there may be something significantly different we bring a 3rd party inspector.

    It may be too late to exercise this option but....

  • Real Estate Agent · San Jose, CA · Member since 2023 · 182 posts · 104 votes
    2y

    @Account Closed Sorry to hear about your experience. Going non-contingent and overasking is unfortunately very common in the Bay Area. However, it looks like your agent did not bother to explain to you about the process and helping you vet the property. Unless you have hard evidence about her "influencing" you or perhaps "misleading" you into going into contract, you are most likely stuck with 3 options - 1. You either leave the deal and lose your deposit, 2. You can leave the deal and have your agent negotiate for a full or partial refund (if the seller is nice enough, which is not uncommon depending on the situation), 3. You move forward with the deal. Feel free to reach out if you have any questions.

  • SF · Member since 2014 · 18 posts · 4 votes
    2y

    Thank you all for the feedback. We closed the home - up and onwards from here on.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.