Need Advice on Home Purchase

[animalfriend]

What is the name of your state? PA - buying in FL

We found a home on ebay that seemed perfect for us. We were concerned because it was listed as "cash only, no time for bank financing" due to a medical emergency. But we had the funds available and liked the sound of the place, so we traveled from PA to FL to see it.

After seeing the property, we wanted to research the taxes and insurance. The auction closed two days after our visit and we weren't able to determine our offer by then, so we asked the seller to let us know if the deal fell through. He contacted us immediately and encouraged us to prepare an offer, which we did. His response was ambiguous and it became difficult to get in touch with him. He'd email once every few days - due to a family member having medical problems.

In the mean time, we discovered the property was in foreclosure, but a sale date had not yet been set.

He finally contacted us and said if the "first" buyers didn't close by Dec 15, he would sell to us. Because he wanted to close by the end of the year and time was getting short (this was the week of December 10), we asked him to send us a backup contract. When we hadn't heard from him, we sent him a contract to review.

I let him know that we had an attorney available to review the final contract, but she had to receive it by the morning of 12/21. We called and emailed several more times, but didn't receive a contract until 4pm on 12/21 (too late for the attorney's review). He wanted to close by 12/29.

The 12/21 contract stated that we must provide $80,000 in earnest money by 12/26 and close by 12/29 if the first buyer didn't purchase (but didn't specify the first buyer's closing date). The $80k would be nonrefundable if we didn't make the 12/29 closing. We felt it was unreasonable to expect a nonrefundable $80,000 (roughly one-third) to hold a property for three days. Additionally, we would only have 5 business days to resolve contract differences, arrange for a home inspection, and close - or forfeit $80,000. (There were other issues as well.)

To us, his proposal was so unacceptable that we just refused and wished him the best. He responded and said we would have the first contract and offered to make changes in order to close by the end of the year. But at this point, we'd have to act without the benefit of legal advice. We told him that a closing is not possible this year. We insisted on having time for an attorney to review the contract and 7 days from signing to closing for a home/pest inspection. We haven't heard anything since.

In fairness to the seller, he has a lot going on in his life right now, with an ill family member and the impending foreclosure. We feel bad about the situation and would like to work this out for everyone's benefit. But we're very concerned because our life's savings are on the line and we're uncomfortable with how things have progressed thus far. Aside from title insurance and consulting a RE attorney, is there anything else we can do?

On the other hand, are we being overly cautions and/or unreasonable in our expectations of the seller?What is the name of your state?

[BelizeBreeze]

Yes, there is something else you need to do.

Walk away from this deal NOW!

[animalfriend]

As I was writing out the explanation, I realized how ridiculous the entire situation sounds and I half-expected someone to offer to sell me a bridge in Brooklyn.

We were a little hesitatant from the start, but after we saw the place, we really wanted it. We were getting our hopes up that things might work out until the contract came with the $80,000 nonrefundable earnest money stipulation. That really made us feel something wasn't right. It didn't make sense to want that much of a deposit only 3 days before closing - unless he doesn't expect us to close for some reason. Otherwise he'd have the full amount only 3 days later. But he knows we're serious buyers.

We really like the property and have alredy invested quite a bit of time and money in pursuing it this far. But we don't to throw good money after bad. Is there any way to salvage the transaction? If we turn everything over to an attorney? I've spoken to two attorneys previously (while awaiting the contract). Both said as long as I have title insurance and a home inspection is done, I should be okay. But I can't help but feel something is wrong.

[BelizeBreeze]

Originally Posted by animalfriend

As I was writing out the explanation, I realized how ridiculous the entire situation sounds and I half-expected someone to offer to sell me a bridge in Brooklyn.

We were a little hesitatant from the start, but after we saw the place, we really wanted it. We were getting our hopes up that things might work out until the contract came with the $80,000 nonrefundable earnest money stipulation. That really made us feel something wasn't right. It didn't make sense to want that much of a deposit only 3 days before closing - unless he doesn't expect us to close for some reason. Otherwise he'd have the full amount only 3 days later. But he knows we're serious buyers.

We really like the property and have alredy invested quite a bit of time and money in pursuing it this far. But we don't to throw good money after bad. Is there any way to salvage the transaction? If we turn everything over to an attorney? I've spoken to two attorneys previously (while awaiting the contract). Both said as long as I have title insurance and a home inspection is done, I should be okay. But I can't help but feel something is wrong.

When I was younger and hanging out in bars, I used to look around at the women and sometimes I'd get a sinking feeling in my gut. Only once did I ignore that feeling and that lasted all of one night when her husband took a baseball bat to me.

Therein lies my answer.

[animalfriend]

Thanks for the interesting perspective. The seller actually emailed us last night and said we could use whatever contract we wanted, he just wants to get it done. I feel bad because I know he's in a difficult position and needs to sell. We like the place and want to buy. If things had transpired differently, it would be so simple.

[lcannister]

WALK AWAY, YESTERDAY. You are proving your vulnerability with each post. Why do I suspect you ARE going to go through with this one way or the other and get burned?

By the way an inspection does not always show up tens of thousands of dollars that have to be spent after the bargain is yours. An inspector is not required to tear out walls for instance to yet many problems can be hidden by a wall.

[efflandt]

$80k non-refundable earnest money without contingencies is a big waving red flag. What if the closing doesn't happen on time because they delay it (or don't show up) or cannot provide clear title? People from various states have posted problems NOT revealed by inspections.

It pays to be extra cautious when remotely dealing with anyone in Florida (many spammers and scammers). Do know if the person selling you the property even owns it, ie, is their name on property tax bills and is tax payment up to date? Many counties have websites where you can check that.

[BelizeBreeze]

Originally Posted by efflandt

$80k non-refundable earnest money without contingencies is a big waving red flag. What if the closing doesn't happen on time because they delay it (or don't show up) or cannot provide clear title? People from various states have posted problems NOT revealed by inspections.

It pays to be extra cautious when remotely dealing with anyone in Florida (many spammers and scammers). Do know if the person selling you the property even owns it, ie, is their name on property tax bills and is tax payment up to date? Many counties have websites where you can check that.

AND if there is hidden hurricane damage

[animalfriend]

I sincerely appreciate every word of advice offered thus far. In truth, we haven't made up our minds. The seller's actions had spooked us and the comments posted here reaffirm our concerns.

*If* we do proceed, it won't be on the terms he suggested. We wouldn't even consider a nonrefundable earnest deposit of $80,000. But we're very concerned that he made such an unreasonable request. Because we're unfamiliar with FL practices, we were going to consult an attorney for detail negotiation (in our area of PA, buyers typically put only $500-$1000 down). We've checked the tax records, the deed, and spoken with the title insurance company - and the seller is the owner of record (assuming the person we met isn't impersonating him). We also went to the planning/zoning office and confirmed the property is not in any violation and all permits/processes have been adhered to properly.

The homes (there are two) are less than 6 years old and are not in a hurricane-prone area (~ 75 miles from each coast). While we realize an inspection may not reveal every potential problem, we're not as concerned with the buildings themselves (both modulars) as we are with a potential problem involving our right to the land. As I understand it, title insurance protects only against recorded liens. I don't think there could be any mechanic's liens against the place because the most recent Notice of Commencement was filed in 2002. But we don't know if there could be some other claim against the property that would not be revealed by the title search.

We're really torn over the situation. My gut feeling is that something is wrong, but I don't have anything to substantiate that (other than the seller's actions thus far). But we don't want to pass up a place that we really want based on a suspicion. There's enough money involved that we'd be willing to hire an attorney to do whatever is possible to be sure things are in order, but aside from a title search (or walking away), we don't know what to do.

Again, I thank you all for the insight. At least you made me realize I'm not totally paranoid.

[BelizeBreeze]

Then tell the seller that $80,000 non-refundable deposit is unacceptable. Offer $5,000 or walk away.

[animalfriend]

I'd like to thank everyone again for their input and thought I'd post an update. I emailed the seller about a week ago and made an honest effort to resolve our differences. Of course, the $80k was the biggest and only really "nonnegotiable" issue. I told him we didn't have a problem with a modest deposit, but given it would only be holding the property for 7 days, it wouldn't be $80 grand.

The other contract issues were regarding the home/pest inspection. He had omitted the pest inspection and limited the home inspection to specifics. We wanted to reinstate a general home and pest inspection.

We wanted to be the primary contract holder before leaving PA to come to FL to close, so we didn't drive all the way down there only to turn around and come home.

And there was a discrepany in price, which we were willing to negotiate (our offering price was 6% less than his asking price).

I expressed a sincere desire to resolve these differences and haven't heard anything. I attempted to contact him since then to see what's going on, but I haven't received any response. So, I guess either he finds our terms unacceptable or he's sold the place.

We're out travel expenses and the costs of getting the funding out of other investments so we could close immediatey (as he requested). But we just couldn't agree to those terms, so I don't feel we had any other choice. Still, it's disappointing because we had our hearts set on the place, but it was a risk we couldn't take.

Again, I sincerely thank you for your input.

[Gadfly]

I didn't see anywhere that you determined ownership of the property and if you were actually dealing with the owner, that this was not some kind of a fraud.

Hey, I don't own the Brooklyn Bridge, so it's not available for me to sell, but I do live in Florida, and I do have 5 acres of partly swamp land near Daytona that you can have for $60K. Send me a non-refundable deposit for $40K and I'll finance the rest.

[BelizeBreeze]

Originally Posted by Gadfly

I didn't see anywhere that you determined ownership of the property and if you were actually dealing with the owner, that this was not some kind of a fraud.

Hey, I don't own the Brooklyn Bridge, so it's not available for me to sell, but I do live in Florida, and I do have 5 acres of partly swamp land near Daytona that you can have for $60K. Send me a non-refundable deposit for $40K and I'll finance the rest.

Hell, I can do better than that. I own 50 acres with a parking lot and grandstands just outside of Daytona. There is an oval driveway with garages and parking with a large garden spot inside of the oval.

I'll let it go for 1.3 mil.

[LindaP777]

Originally Posted by animalfriend

The 12/21 contract stated that we must provide $80,000 in earnest money (roughly one-third) to hold a property for three days. The homes (there are two) are both modulars.

WOW! 2 modular homes for roughly $240k! Homes sure are expensive in Florida!
Just a reminder, modular homes don't appreciate as fast as other type of homes. Mobile homes (one step below a modular house) depreciate. I'd get an appraisal if I were you. And a title search. And an inspection. And don't forget title insurance.

[lcannister]

Originally Posted by BelizeBreeze

Hell, I can do better than that. I own 50 acres with a parking lot and grandstands just outside of Daytona. There is an oval driveway with garages and parking with a large garden spot inside of the oval.

I'll let it go for 1.3 mil.

Uhhh BB does that have easy access, if so I'll email you a check right away!