Was I duped by my realtor, seller, and sellers agent?

9 Replies

I am currently purchasing a 2-unit multi-family (1st time) that is fully occupied and getting ready to close in 2 business days. When I was shown the property back in early September, I was advised by my realtor that the 1st unit was being rented at $900/month, and 2nd unit at $950/month. I was also issued the listing sheet on two occasions that also specified the rent amounts.

Shortly after the seller accepted my offer (on 9/16/17), I requested an estoppel certificate and was told by my realtor that he would be working on it. Two weeks went by and still no estoppel. I reached out and questioned the status of the estoppel on 10/5/17 in which he stated “still waiting on the estoppel but we only need that a week or so before closing”. At that time I trusted my realtor’s word and stopped bugging him about the estoppel (Huge mistake on my part!)

On 10/25/17 I finally received the estoppel certificate which shows that the 1st unit is currently renting at $800/month and 2nd at $926/month.

It appears that the seller or seller’s agent may have misrepresented the rent amount possibly so that I could visualize a higher cash flow. I also believe my realtor or the selling agent withheld the estoppel as it is dated for 10/3/17.

Because I have almost no time left to do anything I’m left thinking I got duped by my realtor, seller, and seller’s agent. Again, I close in 2 business days and it just so happens that the estoppel is sent conveniently right before closing.

Do I have any options available legal wise or filing a complaint if I can’t work something out?

Thank you for your time. 

You can put the brakes on Close.   You have received new information which reveals a ~6% difference in revenue performance of the business based upon the original representations made to you.   While this is not an earth shattering revelation, it does warrant slowing the puck down and revalidating the other information you have ... there is nothing wrong with insisting on an extension to digest this new information and decide whether you wish to proceed.

Since you will be looking at ~$1500/yr less revenue than anticipated, you could propose to reduce the purchase price by $1500 to offset the oversight on the part of the Vendor.

Yes, that is material information. FIrst of all, one of the informations you got is incorrect.  Make sure the estoppel one is correct.  Why not ask for the difference in rent for a year as a credit and move forward?

Im sure they dont want to lose the deal on $1000 rent, etc. 

Originally posted by @Roy N. :

You can put the brakes on Close.   You have received new information which reveals a 6% difference in revenue performance of the business based upon the original representations made to you.   While this is not an earth shattering revelation, it does warrant slowing the puck down and revalidating the other information you have ... there is nothing wrong with insisting on an extension to digest this new information and decide whether you wish to proceed.

Since you will be looking at ~$1500/yr less revenue than anticipated, you could propose to reduce the purchase price by $1500 to offset the oversight on the part of the Vendor.

Yep. That's closer to a 7% shortfall in the should-have-been-revealed income, which they then tried to conceal so you'd see it so late, that you'd react like a deer caught in the headlights, such that you'd not be able to do anything about it! 

Prove them wrong! All the best...

What has your agent said? Personally he would be the first person I would be speaking with. Depending on his reaction/advice would change how I moved forward...

I'm new too but that sounds super shady!  My wife is a realtor, pretty sure she wouldn't approve of your agents conduct.  

Originally posted by @Brian Pulaski :

What has your agent said? Personally he would be the first person I would be speaking with. Depending on his reaction/advice would change how I moved forward...

 I sent him an email at 7AM this morning and still no response. It is now 11:12AM. Thank you all for your response(s), I really appreciate it!! 

I personally think you now have negotiating power.

I would reach out to my realtor and escrow officer informing them that you are holding off on closing because of discrepancies. 

Make sure everything from here on in is in writing, if it already hasn't been. Leave a paper trail.

Renegotiate the price or walk away if you feel you were swindled. Perhaps they presents a projected rent roll vs an actual rent roll. In either case, buy if it only makes financial sense.

Your new, but move swiftly and fearlessly on this situation.

To your success!

Call the other agent and ask them to fwd the email to you of when they sent your agent the estoppel.... 

I like the suggestion that you ask the seller to discount the sale by $1000 to cover the loss of rent for the first year.  If the seller doesn't budge, I would put the two realtors in the hot seat.  They drop their commissions by $1000 or the deal is off.  They will find a way....

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