Michigan
I signed a purchase agreement for a condominium back in December. They began renovations on the unit with a $1,000 earnest deposit, and all was well. The condo took 1 month longer to complete than expected, my locked interest rate expired, and all sorts of hassles ensued.
Upon agreeing to purchase the condo, I was under the impression (given by the developer, the seller's agent and my agent, the buyer's agent) that 8 of the 20 units in the development had sold. Upon having then loan underwritten, only 2 deeds were found for units in the development and one of them belonged to one of the partners of the development group. With financing for condo's where it is in today's market (going down by the day), nearly every lender that had offered to take my loan was rescinding their offers. Certainly, none of these lenders would provide 100% financing, as outlined in my PA, and I was looking at having a much higher interest rate than the one I had locked assuming the closing would happen much sooner. Construction delays were completely the fault of the developer and their contractors.
Afters days of conference calls between realtors, developer, mortgage brokers and banks, offers were being made to settle the issue. I had lost all confidence in this project, thinking it wasn't as far along as I had been led to believe, and thinking that within 3 years, not all units would be sold and I would be competing with the developer for resale.
The developer offered a buy-back clause to ease that fear, BUT it was between months 24 and 25, with 6-months advanced written notice, at purchase price less all realtor fees. That offer would have given me only one month to decide if I wanted to sell it back to them, and I would have taken at least a $20,000 hit at resale.
I didn't take the offer and decided to walk away. In a last ditch effort to get me to buy, the developer came back with an offer to give me 100% financing, at 6.75% for 30-years. Those were the exact terms of my PA, and I saw that they were trying to make it so that if I did not take the offer, it would be a breach of the PA contract. But, what they couldn't offer me, which was also specified in my PA was FHA financing. I was hanging my hat on the fact that I could not obtain FHA financing and was therefore in the right in sticking with my decision to walk away from the deal.
My realtor's appeal to the developer to reply within 30 days or the earnest deposit money would be returned to me out of the escrow account, was met with a letter from the developer's attorney, requesting reimbursement for damages to the tune of $20,000 or purchase of the condo, or they would file suit for breach of contract.
I hired a real estate attorney to draft a letter stating that neither would happen, and that I was in the clear of walking away. My attorney also pointed out that I was never asked to sign for the condo documents, which, by Michigan state law, the developer would have needed to provide me with and would have needed to have me sign for, starting a 9-day window during which I could review the condo documents and back out from the PA at will. They provided me with the condo docs but I was never asked to sign for them.
In Michigan, the developers can still pursue legal action for up to 6 years (the statute of limitations on a breach of contract in this state).
We have received no reply to the letter from my attorney. I'm now looking at losing $850 in attorney fees to review the case and draft a letter, in addition to $850 in fixtures that I purchased for the condo and had installed prior to my expectant close date. My $1,000 earnest deposit is sitting in an escrow account with my realtor, and will be released to me within 15 days or so if the developers do not contest it directly with the real estate agency that is handling my case.
My questions are these:
Do I have grounds to counter-sue for misrepresentation of the property?
Do I have a leg to stand on to get my attorney fees paid by the developers, at very least?
Can I request that they reimburse my expenses for fixtures that were installed in the unit and which they will resell when they sell the unit?
Should I be holding the real estate agents accountable for not doing due diligence from the get go and investigating what the developer told them about the property?
Any advice is greatly appreciated! This has been a terrible first-time buying experience. I have been waiting for 4 months to move into my new place, am currently out $2,600 ($1,000 of which I hope to recoup when the deposit is released to me), and I am terribly soured to the whole experience.
Thanks for the advice. I trust that my attorney is doing her job well, but I don't think it hurts to gather other expert opinions where available.
What is the name of your state?
I signed a purchase agreement for a condominium back in December. They began renovations on the unit with a $1,000 earnest deposit, and all was well. The condo took 1 month longer to complete than expected, my locked interest rate expired, and all sorts of hassles ensued.
Upon agreeing to purchase the condo, I was under the impression (given by the developer, the seller's agent and my agent, the buyer's agent) that 8 of the 20 units in the development had sold. Upon having then loan underwritten, only 2 deeds were found for units in the development and one of them belonged to one of the partners of the development group. With financing for condo's where it is in today's market (going down by the day), nearly every lender that had offered to take my loan was rescinding their offers. Certainly, none of these lenders would provide 100% financing, as outlined in my PA, and I was looking at having a much higher interest rate than the one I had locked assuming the closing would happen much sooner. Construction delays were completely the fault of the developer and their contractors.
Afters days of conference calls between realtors, developer, mortgage brokers and banks, offers were being made to settle the issue. I had lost all confidence in this project, thinking it wasn't as far along as I had been led to believe, and thinking that within 3 years, not all units would be sold and I would be competing with the developer for resale.
The developer offered a buy-back clause to ease that fear, BUT it was between months 24 and 25, with 6-months advanced written notice, at purchase price less all realtor fees. That offer would have given me only one month to decide if I wanted to sell it back to them, and I would have taken at least a $20,000 hit at resale.
I didn't take the offer and decided to walk away. In a last ditch effort to get me to buy, the developer came back with an offer to give me 100% financing, at 6.75% for 30-years. Those were the exact terms of my PA, and I saw that they were trying to make it so that if I did not take the offer, it would be a breach of the PA contract. But, what they couldn't offer me, which was also specified in my PA was FHA financing. I was hanging my hat on the fact that I could not obtain FHA financing and was therefore in the right in sticking with my decision to walk away from the deal.
My realtor's appeal to the developer to reply within 30 days or the earnest deposit money would be returned to me out of the escrow account, was met with a letter from the developer's attorney, requesting reimbursement for damages to the tune of $20,000 or purchase of the condo, or they would file suit for breach of contract.
I hired a real estate attorney to draft a letter stating that neither would happen, and that I was in the clear of walking away. My attorney also pointed out that I was never asked to sign for the condo documents, which, by Michigan state law, the developer would have needed to provide me with and would have needed to have me sign for, starting a 9-day window during which I could review the condo documents and back out from the PA at will. They provided me with the condo docs but I was never asked to sign for them.
In Michigan, the developers can still pursue legal action for up to 6 years (the statute of limitations on a breach of contract in this state).
We have received no reply to the letter from my attorney. I'm now looking at losing $850 in attorney fees to review the case and draft a letter, in addition to $850 in fixtures that I purchased for the condo and had installed prior to my expectant close date. My $1,000 earnest deposit is sitting in an escrow account with my realtor, and will be released to me within 15 days or so if the developers do not contest it directly with the real estate agency that is handling my case.
My questions are these:
Do I have grounds to counter-sue for misrepresentation of the property?
Do I have a leg to stand on to get my attorney fees paid by the developers, at very least?
Can I request that they reimburse my expenses for fixtures that were installed in the unit and which they will resell when they sell the unit?
Should I be holding the real estate agents accountable for not doing due diligence from the get go and investigating what the developer told them about the property?
Any advice is greatly appreciated! This has been a terrible first-time buying experience. I have been waiting for 4 months to move into my new place, am currently out $2,600 ($1,000 of which I hope to recoup when the deposit is released to me), and I am terribly soured to the whole experience.
Thanks for the advice. I trust that my attorney is doing her job well, but I don't think it hurts to gather other expert opinions where available.
What is the name of your state?
