About Eric Sexton Expertise All aspects of buying and selling homes including: General real estate questions, Contracts, Negotiations, surveys, title work and general questions about mortgages. I CAN NOT GIVE LEGAL ADVICE AND WILL NOT BE ABLE TO ANSWER QUESTIONS WHERE LEGAL ADVICE IS NECESSARY.
Experience
I have been a real estate agent for 6 years and a broker for 2 years.
Organizations National Association of REALTORS and Texas Association of REALTORS.
Expert: Eric Sexton Date: 9/20/2007 Subject: dual hats: lender and seller
Question Hi Eric,
We contacted a seller about a lot in Texas. The seller is a leader and insisted on the land purchase contingent on the financing of the construction loan. We went against our instincts and wrote the offer as a FSBO. The contract states that we will take a loan out for at least $200,000 plus $41,500 for the land. We have gotten several bids for the construction and because of the site work that need to be done, the lowest is $320,000 plus land (41,500). Due to the minimum building requirements for the nieghborhood, we can't build for the $200,000 as the contract specifies. And we are capped out at about $300,000 total, if we can even get approved for that! So we are about $70,000 over budget.
We have not even gone through the loan process because we were waiting to get some bids back. The lender application fee is $565.00 which he did not disclose to us until after the contract was accepted.
The lot has been on the market for several years. Before we made an offer it was listed will a realtor for $45,000. We still want the lot to build on in a few years if he is willing to sell it. So we offered $42,000. He respond that he would sell for $48,000. The original $41,500 plus $6,500 for the loss of commissions on the loan. Furthermore, he has threatened legal action if we don't close on the loan or purchase the land for $48,000 due to his losses while it has been off the market.
This guy has been very shady, putting some things in emails and verbally telling us other things. He seems to know how to cover himself. We only have $500 down in earnest money. Does he have any legal ground for damages? Can we walk away from the deal with or without our earnest money? Does anything on his part sound unscrupulous?
thanks for any info!
Kris
Answer Kris,
I would suggest that you contact the Texas Department of Savings and Mortgage lending (http://www.sml.state.tx.us/). This is the state department that regulates mortgage brokers and mortgage bankers. They can help you determine whether or not this individual is in violation of any laws/rules.
I would also contact a lawyer to see what legal recourse you might have. It all really depends on how the contract is written as to what your options are and whether or not you might get your earnest money back.
I'm sorry you have had such a bad experience. There are good real estate agents and good mortgage people out there. It can help to go with a big name lender/bank if possible. Talk to friends about good real estate agents they have worked with.
Good Luck and let me know if you have any other questions.
