Expert: Jessica Bryan - 3/29/2011

Question
We met a real estate agent via internet from a listing. We had found a home in Newport News VA. We wanted to "flip" it and buy the home we really wanted around the corner.The reason for the purchase is that the agent promised us after speaking with her lender we would qualify to purchase both homes if the one we wanted came available. She also said she had an appraiser who would "inflate" the appraisal on the flip house. we informed her we were not interested in being dishonest. Also I should mention she sent us to this lender prior to wanting to show us anything and they were sharing info without our consent about what we could afford.We had not signed with either party. Needless to say this agent continually was not returning calls after we found problems after the inspection was done. She said she would tell us when the other house came available she didnt do so. We called her and wanted the house that was our dream home. We found out that we did not qualify for both homes. We were in a binding contract for this home. She had us speak to her attorney who was our closer he said we would be liable. We fired our agent through her boss. the day before close we called and asked her boss about a walk through and told her we never got a copy of the HOA rules. She then said shed talk to the agent. then shecalled back and told us to meet the assistant next a.m. we did and found water  damage on the inside of the home. Again we did not want the home as there were more issues. Later that day we met with the closing attorney. He spent two hours going over our paperwork and talking with both agents about the damage and us not getting a proper walk through. My husband told him that we did not get HOA rules. we think he might have forgotten this since this was such a mess. Finally he came back and said the selling agent had spoke with selling bank and he drafted an agreement they would pay for damage from water in kitchen and garage so we signed the paperwork to close. On monday he called and said that they signed the HUD and now were refusing to agree to pay for damages from water. Again we brought up the HOA and not recieving it. He said he talked to both agents and that we "waived our right to it." We told him on our paperwork there is an addendum that states we should recieve it in a hard copy. he said if he would have known this on friday we wouldnt have closed.The HUD has been signed at this point and the attorney asks if we want him to send an agreement to release us from the home to the bank. We said yes. He then called back and said that the selling agent said she would sue us for commissions and that the bank will not release us. What can we do? HELP PLEASE WE ARE  DESPERATE!! Had we known we cant bring our RV here and that we cant cut down trees or paint the shutters we would never have bought this house. We just found HOA on internet!! Thank you for any advice. We are trying to find an attorney but the closing attorney said we need to have an answer this am.

Answer
Dear Michelle;
I am answering this in haste since you are being pressured for an answer.  Do not close on this house!!!  Call the lender and tell them to stop payment on the loan.  Explain about water damage and tell them that you are afraid that there could be mold issues because of this.  (That will stop them!!)  Were you able to get home insurance?  If they knew about the water damage they would want to see the way it was handled since they usually need to use a mold remediation company as well when there is water damage.  In addition there are so many things that were done incorrectly the agent should be far more worried about you suing her!  You can file a complaint with the VA real estate commission and let the agent know that she didn't represent you adequately.  Did you sign an agency disclosure? Also; the issue of the HOA rules: the agent had no right to sign that you waived your rights.  Since you will clearly break the HOA rules you might want to bring that up to the lender as well.  The closing attorney is supposed to represent you.  Call and make an appointment to talk to him/her.  Yes; you probably do need to give an answer in order to record without having to redo the documents but that doesn't mean you really need to close today!  Don't allow them to push you into this until you feel comfortable with everything.  Also, call the real estate commission and ask for some "free" legal counsel.  They have attorneys on their staff who can help advise you.

I am hoping that this is resolved positively.  Please let me know how it turns out.

Best wishes.

Jessica Bryan