When the MLS fails you

Question

Hey folks I was just about 2 weeks from close on a SFR townhouse in my hometown.   Unfortunately we learn via a MLS omission by the listing agent that the property was actually a condo and has an high HOA fee for the area.    This is a double whammy because in the area condos have an pseudo equity "ceiling' the appraisal and secondly the HOA cuts about 40% of my projected free cash flow.   After we found out I asked the seller for a $4K credit which could cover the HOA for about 5 yrs but I don't believe the equity increase will catch up.   My numbers and brain say run.  Do you think I can get some my earnest money back because of the omission?

Mike Cumbie · Answer

@DeWayne Allen

DISCLAIMER: I am in no way licensed in your state, have no clue what your contracts state and am just going off the little information in this post. Plus, I am just some dolt on the internet spouting useless information that should not be followed by anyone :)

I personally would take a copy of the MLS printout from the time of offer (I include it with every offer to avoid situations like this and many many more). Put it in MSPAINT, Use the arrow draw tool and point to the section that says HOA Fee $0. Send that image as a JPEG over to the listing agent and ask how we are going to resolve this.

I don't go all scorched earth and start contacting brokers and DOS people and the board. If the answer is not a solution or at least a path to a solution, I ask for the E&O carrier (Errors and Omissions insurance carrier) information due to the error and omission in the listing that caused my clients numbers to be off. Perhaps we can come to an agreement that 3 Years of the HOA fee is paid by someone else.

Just my 2 cents and good luck!

DeWayne Allen · Answer

So folks we got a response and as I am sure @Dan Barli stated the lawyers will need to get involved.  Here it is "They are telling us that they are not willing to cancel the contract or give the EM back. They are stating that the contract is still active and they intend on closing."   We have the realtors team lawyers working through the issue.  We have already cancel the loan processing and have the lender send over the appraisals.  Any more pointers?

DeWayne Allen · Answer

Thanks folks

Dan Barli · Answer

Did you use an attorney @DeWayne Allen? What did your contract state? If the omission was made by the listing agent, I would think you would get all your EMD back. Did you have your own agent on this transaction?

Mike Cumbie · Answer

I would make a play for all of it. In my area it would be a no-brainer you would have no problem getting it.