Screwed by House Seller: Looking for advice/similar experience

In My Humble Opinion
21

This won’t help with your situation, but I’ll note that it’s amazingly easy to do your own checking of the title to and liens/encumbrances/rights-of-way on any chosen property. For someone who has never done this, budget 2 hours at the county Registry of Deeds (if you have experience, it’s perhaps half an hour).

In the rare case where the situation is complicated, you won’t necessarily have learned the whole story (though it should be clear that further research is indicated). Much more often, things are straightforward. You’ll be able to see when the current owner bought the property, how much was paid, what mortgages apply, if and when discharged, property tax liens, IRS liens, etc., etc. My experience suggests that you may well discover things that are overlooked by title companies.

I’m not saying this will preclude the need for a professional title search. But I really can’t see how it would be smart even to make an offer on a property without doing this easy work.

22

[QUOTE=50million]
Well, plenty of people have answered the technical questions; I’ll give you some advice, which I’ll bet you’re already thinking in the back of your head. You’ll get your earnest money back easily - this screw-up isn’t your fault, therefore, you get your money back. You could fight to get some of your other money back on moving deposists and such, but it’ll cost you more to fight it than you’ll get back. Like **Annie-XMas ** said, try to rent your current house for a little while, if not get an apartment. You’re the one in control here, though you might not realise it. This is a buyers market and you’ve sold your house! Take this opportunity to identify 3 houses that you really like. Offer 85% (how high up you go is up to you, I wouldn’t go above 90%) on house number 1 - if they accept, great, if not go to house number 2. If house number 3 doesn’t accept, then go back to #1. Rinse, lather, repeat. I’m sure this sucks right now, but you can turn this into a winning situation for you. Don’t waste your time fighting to get too much back from this house, just get your earnest money back and get out.
[/QUOTE]

We’re going to give it one last shot, as we really like the house. As my mom said “don’t blame the house for the bad owners”.

Latest we heard was that the seller’s tax lawyer was getting the tax liens moved over to the owner’s new house (which, apparently, is far more expensive than this one). That process “should” take 4 - 6 weeks.

What we decided was to give an ultimatum - we’ll push the closing back two months and then we cancel contract. In return, we move into house this weekend and rent the house for a modest sum per month (about 60% of what the mortgage would be, or 40% of what mortgage/insurance/taxes). This amount is only a little more than what we’d have to pay for apartment rent anyway.

If seller can’t close in two months, we get third month at place at same rent.

Seller has to give us bi-weekly updates on tax lien situation (so we have even more than 1 month warning of needing to find a new place).

Our agent is also going to try to get it in writing that we (but not seller) can cancel contract any time in those two months on off chance we either find a place we do like better, or find we hate this house.

We’ll see if they accept. They have until end of day tomorrow to do so.

This sucks. Dishonest people suck.

Oh, and definitely reporting seller’s agent to her broker and state board.

23

Just a heads up if you do end up getting the house…

Make sure you follow up with your county to make sure the liens have moved from your residence. There was a lien on my house when I bought it and it said right there in the paperwork that I signed “seller will pay the tax lien.” I bought it fair and square…

The seller DID pay the tax lien, but they paid it to the title company who then paid it to the IRS but uh…with a bounced check. Yeah you heard me - their check bounced!

Anyway, I knew nothing of it until about 6 months later when I got a summons from the county prosecutor for the lien on my house. Whoops! Luckilly, my real estate agent rocks and took care of it, but I still had to do a lot of talking with the county prosecutor’s secretary to make sure I was all good.

The secretary was extremely nice and helpful (as helpful as she could be in this situation) so I would recommend that anyone dealing with home sales and liens keep in touch with the right county agencies to make sure everyone does what they say they are doing.

Good luck!

24

They got tax liens and too much mortgage on one house and they are buying a MORE EXPENSIVE house?

How do people live like that? :eek:

Yes, the seller’s agent is required to disclosure everything they know about the house. I would report the seller to your agent’s broker and the selling agent’s broker, the state REALTORS association and the state Real Estate Commission. If you can prove that the agent knew about the financial dealings of the house, you have a good case.

25

There is really nothing more you can do that what you’ve done. It sucks that the seller didn’t tell you about the liens. But he wouldn’t have been able to land a buyer if he did. This current situation is likely just what he needed. It gives him the leverage to get out of the house into another property he wants. My advice, for what it’s worth is to be very leery.

Follow your attorney’s advice. One good thing about attorneys, this is just business to them. They are not emotionally invested and earn their hourly rate by offering you solid, researched, dispassionate advice on how to best protect yourself. Follow it. If he/she says walk away, do it.

From the limited information here the seller impresses me as a real slimy bastard. He needs you to buy the house and wants you in it. He wants you to help him with his problem. Make sure everything you sign is reviewed and approved by your lawyer. You don’t want to get stuck with even part of his problem. Moving into the house will get you emotionally attached to it. You will see it as yours and likely willing to do more to stay in it once your in that you would over the closing table.

26

I think you should walk. Jimson Jim is right. This is a buyer’s market and you were able to get your house sold. From Musicat and Annie-Xmas have said, the seller’s agent should have known about the short sale and disclosed that to you. If they have already screwed you once, what makes you think that they won’t do so again. What other defects do you think that the house has concealed? Has the bank signed off on the sale, are they going to sign off on the sale?

Get a temporary apartment and move in there. Put most if not all of your stuff in storage and find a place that you like that is being sold by someone ethical who isn’t concealing adverse conditions.

My advice is subject to your attorney’s advice.

27

One thing that everyone should know about is “gap insurance”. It covers times between events that title insurance does not (yes, there are gaps!). Talk to your title insurance company about this. It’s probably a good idea for the very paranoid. Or the very wise who think that 99.99% coverage isn’t good enough.

28

[QUOTE=rexnervous]
Can we get money back from seller (or seller’s agent) for the lost deposits on moving, or renting an apartment, or storage of furniture.

[/QUOTE]

Just wanted to observe that once you sell your current house, until you buy a new one you won’t have a mortgage payment. Plus you will have your proceeds from the sale to invest in a money market or someplace. So one way of looking at it is that your rent/storage won’t really be too terribly different from whatever you would have been paying on your new house. You might want to look into those PODS-type things, where you load up your goods and the entire container gets stored, so your belongings don’t need to be loaded and unloaded twice.

Meanwhile, you can hang out in an apt/condo on a month-to-month lease, find a home you love with a non-scumbucket seller, and negotiate to buy it from the strongest possible position.

My money says you within 6 months you end up in a home you like better than the one that fell through!

29

[QUOTE=Annie-Xmas]
They got tax liens and too much mortgage on one house and they are buying a MORE EXPENSIVE house?

How do people live like that? :eek: .
[/QUOTE]
I had the same WTF moment when I read that. Seriously, what… the… fuck…?