About to make worst decision of my life

36 Replies

In four hours I will be finalizing a purchase of a home that I generally consider the worst decision of my life. I guess the decision is already made since I am going to the closing office to hand over my check. 

I made almost every mistake in the book buying this place and I am embarrassed to being purchasing the place. I rushed my self into purchasing a property because I felt I needed to own a building today. I trusted the seller that the property they were selling was in good condition and I did not walk through the property for the 1st time until just days before closing. The inside of the house is in terrible condition and there is nothing in contract I can do about it. I signed a completely one sided deal all because I was too busy with my day job to slow down and seriously evaluate the deal. I am an idiot plain and simple and just wanted to vent. My sole advice I can offer to new home buyers like myself is if you feel rushed to make a deal on a home just stop walk away and seriously think about the decision in a quite place without any outside influences on your choice. Don't let anyone rush you into making a decision.

I don't know what kind of Earnest Money you have into this deal, but you really have to ask if the losses by walking away are going to be less than the amount if you stay in.  If yes, just walk away and call it a cheaper lesson than if you stick around.

Good luck.

Were in the same boat.  I know what I'm getting into with mine but its probably way more work and headache than I should be getting into.  Its certainly not a great deal.  I'm still stoked though.  It will be my first house and I'm going to have a 2 car garage.  One side I'm stoked the other side I'm dreading.  I have to fix the foundation, some structure, change out the furnace/water heater,  pay for a roof and a lot of other things I just want to do.  On top of moving myself, my business and running the business.  All after a rough month where both my trucks broke down and I lost my helper.

  Hopefully you can make time to work on the place so you don't lose much money and can gain some experience.  

Oh and I really hate banks now.  I was supposed to close last week. They drug there feet haven't communicated with me at all the last month.  I managed to get another extension til today.  I had to agree to pay $150 a day until today it will be refunded if I close today.  Call the bank 3 times yesterday finally talk to someone.  Looks good for tomorrow were waiting on one signature,  I'll call you shortly, well I still haven't gotten the call and don't  know if I'm really closing yet.  Can't plan anything dealing with these people.  I would of been packing last week but still don't know if I'm really moving.

Originally posted by @Kevin Beres :

In four hours I will be finalizing a purchase of a home that I generally consider the worst decision of my life. I guess the decision is already made since I am going to the closing office to hand over my check. 

I made almost every mistake in the book buying this place and I am embarrassed to being purchasing the place. I rushed my self into purchasing a property because I felt I needed to own a building today. I trusted the seller that the property they were selling was in good condition and I did not walk through the property for the 1st time until just days before closing. The inside of the house is in terrible condition and there is nothing in contract I can do about it. I signed a completely one sided deal all because I was too busy with my day job to slow down and seriously evaluate the deal. I am an idiot plain and simple and just wanted to vent. My sole advice I can offer to new home buyers like myself is if you feel rushed to make a deal on a home just stop walk away and seriously think about the decision in a quite place without any outside influences on your choice. Don't let anyone rush you into making a decision.

Do not be afraid to walk away from the deal!  Anyone who has done this for a while has walked away from some serious earnest money to avoid a bad deal !!

A number of years ago when I was just stating out, I walked away from purchasing a house for $35,000 in West Texas.  It was a FNMA and the earnest money was $3500.  At the time, I can't express how much it hurt to walk away but I figured out there was no way I was going to make any money at that price.  On a positive note, I purchased that property months later for $15,000 and sold it for $26,000 .

If the deal isn't right don't do it.  Take is as a lesson learned and make back on the next deal

@Kevin Beres Agrre with all the above about walking away, but we don't know how much EM you have.  I generally don't like someone failing to honor a contract, but if there was deception by the seller (even though you foolishly accepted it), then, fair is fair.  Also, by being willing to do it, you could likely negotiate a better deal at the last minute.

@Kris Fox & @Wayne Brooks I am not concerned about losing my earnest money deposit. It is a larger sum near $4,000. Can I just walk away without being sued? Couldn't I have a specific performance lawsuit on my hands? If I would simply lose the EM deposit I would be ok with it. However I am concerned about the other parties suing me in the contract including the Title agency. If I walked couldn't I still be forced to be closing cost as well?

In North Carolina and South Carolina, there is a law that limits the amount a seller can get from a non-performing buyer to the amount of Earnest Money Deposit. 

I'd call another title company to see if there would be any recourse.  If you're already easily comfortable walking away from ~$4k, an extra $700 shouldn't be enough to endure the stress you'll undertake if you take on this dog of a project.

Originally posted by @Kevin Beres :

@Kris Fox & @Wayne Brooks I am not concerned about losing my earnest money deposit. It is a larger sum near $4,000. Can I just walk away without being sued? Couldn't I have a specific performance lawsuit on my hands? If I would simply lose the EM deposit I would be ok with it. However I am concerned about the other parties suing me in the contract including the Title agency. If I walked couldn't I still be forced to be closing cost as well?

Tell the seller you have to walk and you understand the hardship they went through. I had to walk from a property and lost a $1,000 EMD but then several months later bought the property for $2,000 less than what I was originally going to buy it for. So I made out on the deal in the end.

If you don't try you won't know.  It's better than losing 10x that amount in the long run.

No the title company is not going to sue you as deals fall apart at the last second for them all the time

Seller's suing a buyer for specific performance is very very rare.

Why did you not see the property and have estimates done on the rehab prior ?  Did the seller make any representations regarding the condition in writing ?  Is a seller's disclosure required in Virginia ?

I would consider requesting a postponment of the closing based on "a situation has come up" and not lay my cards out as to what I will do and force the sellers hand.  I would also get some legal advice form a Real Estate attorney and not just an Attorney as to how to proceed.  As long as you are prepared to lose your earnest money, take some time to consider all your options.  If the deal is bad as you say,  that seller will be more than happy to go ahead and close a couple of weeks from now as well if you decide that is the best option.  You might even be able to negotiate the earnest money loss down

Part of your REI team should include an attorney. I will not sign anything until I have ran it by my attorney.

If this is truly such a BAD deal and you will not make anything then walk away from the 4K. Run the numbers on the BP calculators and determine this asap if you have not already done so. It will only take half a day to find an attorney to run the contract by to determine if there will be any negative consequences other than losing your EM. With that said, all of us BP peers have responded with little information. Good luck to you and I hope you find the best solution!

Ok lets get down to numbers What did you pay What is the fmv? What is cost of repairs? What will be your final number all in after fixing / Just saying you made the worst deal without any facts does not make sense

Consult a lawyer.  Being sued to perform the contract is a real possibility.  You want out of the contract based on the condition of the property, which you admit you did not bother to learn till late in the process.  This seems like a perfect example of when someone can be sued to perform the contract.

I would just turn around after closing and try to sell the property ASAP even if it means a loss, and just consider that loss a payment towards your education.

@Kevin Beres Simply read your contract. Is it the Virginia Realtor's contract? We don't know if you used the standard Realtor contract, but most limit the Buyer's losses to the EM.  Usually the right to sue for specific performance is limited to the Buyer, not the seller.  If you haven an agent, they will likely encourage you to close, of course.  Talk to a  real estate attorney, who is not associated with the title co.  Again, after the sellers knows you are walking, you may can renegotiate.

Plan of action is to extend closing date well I review the contract with a real estate attorney. I called the closing company and asked them to extend the closing date a couple days but they said it couldn't be done. Is this correct information? Are closing companies not able to change the closing date if it is scheduled for that day?

I was only able to get the closing date moved till late this afternoon.

If I am able to move the closing date back I would like to review the contract with a lawyer to see what my options are.

@Kevin Beres

 - not sure about the specific laws in Virginia, but from my experience (past Mortgage Loan Originator here) - closings can be moved.  They may be telling you that the date can't change because they have all the docs ready to go with today's date on them.  There may be additional charges involved with changing the date.  Maybe ask about this & if you cover the charges see if you can push it out...

We also know from personal experience (in Indiana) that the purchase agreement doesn't hold any weight.  We were selling our house a few years ago & the buyer walked away the night before the closing.  We checked with a lawyer & were basically told that the purchase agreement wouldn't hold up anything in the court of law.  *Of course, this is just our experience & you need to check with an attorney on your end.*  We got to keep the earnest money & waited for another buyer to come along.  

Good luck with however this shakes out.

Well, the Central VA realtor contract states that either defaulting party is open to "all legal remedies allowed by law" in addition to the other party's damages, And is responsible for the Realtor fees, just as if it had closed. Everything is negotiable though, of course. Virginia appears to have different contracts for different regions though.

@Kevin Beres

  who is the seller.. ?   some banks will be like that either close on this date or we terminate.  but if its a private party then you just tell the agent your not closing until such and such date.. you do risk losing your EM... and don't be thinking some one is going to sue you for specific performance as Wayne says the EM is liquidate damages in basically every board of Realtor EM agreement across the country.... and most also have mandatory mediation clauses in them so you never go to court...

And to make you feel better a few years back I was doing a 22 lot subdivision and we had to re engineer it to get it approved.. Stiff opposition from neighbors and they cut us backto 18 lots.. seller would not budge on price we walked.. lost 85k on that one deal.. :)  so it happens.. just move on.

Originally posted by @Kevin Beres :

Plan of action is to extend closing date well I review the contract with a real estate attorney. I called the closing company and asked them to extend the closing date a couple days but they said it couldn't be done. Is this correct information? Are closing companies not able to change the closing date if it is scheduled for that day?

I was only able to get the closing date moved till late this afternoon.

If I am able to move the closing date back I would like to review the contract with a lawyer to see what my options are.

The title company does not dictate the transaction they are just a facilitator. 

@Kevin Beres

It appears that Virginia does require  Seller's Disclosure form.  Were you provided one?  I not you would have the right to terminate.  This is just one of many outs an Attorney y fin for you.  You already feel you were pressured once to make a decision, don't compounded by letting yourself be pressured again.  Take some time to analyze the deal from all angles

To answer your question about the title company saying changing the closing date couldn't be done, no that information is not correct. You're just asking the wrong person, you should be asking the seller/seller's agent. They decide whether or not to extend the closing date, not the title company. The title company just doesn't want to redo the documents, it's more work for them. Ultimately it's not their choice. 

Did they give you a Residential Property Disclosure listing any major defects? If not, and there are major defects perhaps you have an out? Or, is it a part of an HOA? If they don't provide you with the HOA docs you have an out or even if they do and you are withing the window you can always use your HOA "get out of jail free" card to get out saying you do not like the HOA rules. I think you are on the right course as others suggested in consulting a real estate attorney. Good luck!

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