Builder Closed for a price now broker expect overage money returned

[smutlydog]

I have an appointment soon with the number one real-estate law and contract attorney in town. A few weeks ago I spoke with an attorney with limited experience. After looking at the documents he told me I had every right to walk into the title company and demand my money. Well recently I decided to do that. I asked the title company manager what gave her the legal authority to give the funding check to my broker. She offered to stop payment on the check and issue me a new check but wouldn't answer the question. She had client appointments and told me to come back in an hour. When I returned my broker was there with the funding check. We went in a conference room to discuss the matter. The broker told me I could take the check but if I did to expect a legal show down with the customer who bought the home. I left upset without my check and my check is now back at the title company. Here is one possible theory of mine. The broker in error rolled in too many overage upgrades into the loan by mistake and wants me to pay the customer back what couldn't be included in the loan. Maybe??

 

[quincy]

I have an appointment soon with the number one real-estate law and contract attorney in town. A few weeks ago I spoke with an attorney with limited experience. After looking at the documents he told me I had every right to walk into the title company and demand my money. Well recently I decided to do that. I asked the title company manager what gave her the legal authority to give the funding check to my broker. She offered to stop payment on the check and issue me a new check but wouldn't answer the question. She had client appointments and told me to come back in an hour. When I returned my broker was there with the funding check. We went in a conference room to discuss the matter. The broker told me I could take the check but if I did to expect a legal show down with the customer who bought the home. I left upset without my check and my check is now back at the title company. Here is one possible theory of mine. The broker in error rolled in too many overage upgrades into the loan by mistake and wants me to pay the customer back what couldn't be included in the loan. Maybe??

Possibly.

Why didn’t you ask the broker for an explanation?

 

[smutlydog]

Possibly.

Why didn’t you ask the broker for an explanation?

His explanation was confusing. In fact in our original after closing meeting. He told me he was confused himself so he had to turn over all the number to his accountant to get things sorted out. I have since done the math and the way I see it he may have forgot to include overages paid to me in his math. Why does he want me to pay back the overages paid directly to me? Some how it was left out of his math. Confusing

 

[quincy]

His explanation was confusing. In fact in our original after closing meeting. He told me he was confused himself so he had to turn over all the number to his accountant to get things sorted out. I have since done the math and the way I see it he may have forgot to include overages paid to me in his math. Why does he want me to pay back the overages paid directly to me? Some how it was left out of his math. Confusing

The attorney you will be seeing soon should be able to sort it all out.

Good luck.

 

[LdiJ]

I have an appointment soon with the number one real-estate law and contract attorney in town. A few weeks ago I spoke with an attorney with limited experience. After looking at the documents he told me I had every right to walk into the title company and demand my money. Well recently I decided to do that. I asked the title company manager what gave her the legal authority to give the funding check to my broker. She offered to stop payment on the check and issue me a new check but wouldn't answer the question. She had client appointments and told me to come back in an hour. When I returned my broker was there with the funding check. We went in a conference room to discuss the matter. The broker told me I could take the check but if I did to expect a legal show down with the customer who bought the home. I left upset without my check and my check is now back at the title company. Here is one possible theory of mine. The broker in error rolled in too many overage upgrades into the loan by mistake and wants me to pay the customer back what couldn't be included in the loan. Maybe??

Personally? I would have left with the check. They tried to intimidate you and succeeded.

 

[quincy]

Personally? I would have left with the check. They tried to intimidate you and succeeded.

That was actually my first gut reaction - but I think the homebuyer is probably due the refund. It is probably best that smutlydog does not take possession of the check yet.

It appears there were billing errors (perhaps double-billing?), which are not the fault of the homebuyer. Whose fault it is needs to be determined but this should be worked out between the broker and smutlydog.

 

[LdiJ]

That was actually my first gut reaction - but I think the homebuyer is probably due the refund. It is probably best that smutlydog does not take possession of the check yet.

It appears there were billing errors (perhaps double-billing?), which are not the fault of the homebuyer. Whose fault it is needs to be determined but this should be worked out between the broker and smutlydog.

It is possible that there were billing errors, but it is equally possible that something else is going on. I still would have taken the check. I might not have cashed it right away if I felt that there was a possibility that I would have to pay it back, but I would have taken it. Remember, this is all of the proceeds, not just the disputed amount. The fact that it was written to the broker originally was also highly improper.

 

[smutlydog]

It is possible that there were billing errors, but it is equally possible that something else is going on. I still would have taken the check. I might not have cashed it right away if I felt that there was a possibility that I would have to pay it back, but I would have taken it. Remember, this is all of the proceeds, not just the disputed amount. The fact that it was written to the broker originally was also highly improper.

No the check was written to me. The broker just had possession of it.

 

[LdiJ]

No the check was written to me. The broker just had possession of it.

It was even more inappropriate for a broker to have possession of a check not written to him. Title companies are not supposed to do things like that, ever. In addition is was also inappropriate that they gave the broker access to you at their offices (in order to intimidate you) instead of just giving you the check. All of this smells. Now, it is possible that there was some inaccurate accounting somewhere that would indicate that maybe some money is due back to the purchaser, but if that kind of claim is to be made, the person claiming it should be able to demonstrate it in writing, with specific facts and figures to prove it. So, far, that does not appear to be happening. What appears to be happening is that people are attempting to intimidate you and threaten you into doing what they want, without providing the necessary proof.

Again, I would be demanding the check and refusing to speak about the matter any further until proof is provided. I might hold off cashing the check, but I would not allow it to be in anyone's possession but mine.

It is also possible that there honestly is inaccurate accounting somewhere but the broker and the purchaser don't want the bank funding the mortgage to know that and that is why they want you to write a check instead of correcting the accounting. However, again, that smells and smacks of fraud.

 

[quincy]

No the check was written to me. The broker just had possession of it.

I am puzzled by the work relationship between the broker and you, smutlydog. What role does your broker play and how is he generally paid? Could you clarify?

There probably should be a complete review of the work done (the materials and labor costs and any additional work done outside the contractual agreement) and a review of what exactly was paid in advance by the housebuyer directly to you and what remained owing, before any money is distributed to anyone.

I said early on that it sounded like there could have been double billing. Something obviously is off with the billing if the broker believes a huge chunk of money needs to be refunded to the housebuyer.

If you can let us know what the attorney you see says of it all, I would be interested in hearing what is said.

 

[LdiJ]

I am puzzled by the work relationship between the broker and you, smutlydog. What role does your broker play and how is he generally paid? Could you clarify?

There probably should be a complete review of the work done (the materials and labor costs and any additional work done outside the contractual agreement) and a review of what exactly was paid in advance by the housebuyer directly to you and what remained owing, before any money is distributed to anyone.

I said early on that it sounded like there could have been double billing. Something obviously is off with the billing if the broker believes a huge chunk of money needs to be refunded to the housebuyer.

If you can let us know what the attorney you see says of it all, I would be interested in hearing what is said.

The bolded is exactly what should have been done PRIOR TO CLOSING, if there was any dispute on the numbers. Everybody signed off on the accounting being accurate when they signed the closing documents. That is why this whole thing smells.

 

[quincy]

The bolded is exactly what should have been done PRIOR TO CLOSING, if there was any dispute on the numbers. Everybody signed off on the accounting being accurate when they signed the closing documents. That is why this whole thing smells.

Yes. This should have been handled prior to closing. Mistakes were made - by everyone, it seems.

 

[smutlydog]

I am puzzled by the work relationship between the broker and you, smutlydog. What role does your broker play and how is he generally paid? Could you clarify?

There probably should be a complete review of the work done (the materials and labor costs and any additional work done outside the contractual agreement) and a review of what exactly was paid in advance by the housebuyer directly to you and what remained owing, before any money is distributed to anyone.

I said early on that it sounded like there could have been double billing. Something obviously is off with the billing if the broker believes a huge chunk of money needs to be refunded to the housebuyer.

If you can let us know what the attorney you see says of it all, I would be interested in hearing what is said.

The broker makes 2% at closing on all sales

 

[smutlydog]

The broker makes 2% at closing on all sales

The paper work I guessing is going to show the overages went past the limit of the loan( sales price)and so the buyer is owed the money. The thing is I will be paying for those overages out of my pocket. So the customer will get an upgraded security system, windows. extended patio and here is the weirdest thing he will get. When we contracted to build they insisted on their own designer who was a relative. When the framing was complete there was a design flaw that required a $7,000 correction. The buyer argued that we we should of caught that mistake earlier. Rather than argue I agreed to pay for half. Now I am being told that his half is an overage that has to be paid back. Its one of the checks I received from him.

 

[LdiJ]

The paper work I guessing is going to show the overages went past the limit of the loan( sales price)and so the buyer is owed the money. The thing is I will be paying for those overages out of my pocket. So the customer will get an upgraded security system, windows. extended patio and here is the weirdest thing he will get. When we contracted to build they insisted on their own designer who was a relative. When the framing was complete there was a design flaw that required a $7,000 correction. The buyer argued that we we should of caught that mistake earlier. Rather than argue I agreed to pay for half. Now I am being told that his half is an overage that has to be paid back. Its one of the checks I received from him.

That does not sound right at all. It doesn't matter if the overages went past the limit of the loan. That just means that the mortgage company won't loan for the overages and those have to come out of the buyer's pocket. That is not YOUR problem, that is the buyer's problem. DO NOT allow them to make it your problem unless you have the full details in writing AND your own attorney agrees that you owe the money.

GET THAT CHECK. Then discuss with your attorney how to proceed.

Here is what I think happened: I think that the buyer gave you money they had earmarked for other things for the upgrades, expecting that somehow they would get that back from the mortgage company when the loan finalized. The upgrades brought the total up to higher than the mortgage company would loan. The broker wanted his commission bad and talked the buyers into going ahead and closing ( instead of disputing things prior to closing) promising them that he would get the money back out of you even though they did not have the right to it. Therefore he is strong arming you trying to keep that promise. If I am correct your attorney will review the paperwork and tell you that same thing.

The bottom line is the sale has closed. The mortgage company has funded the loan (or there would be no check). Everyone has signed off on everything. The buyer would have a hard as heck time trying to convince a judge to overturn the sale and give them a do over even if accounting errors could actually be proven. Again, get the check and see an attorney. If there were actually accounting errors make them prove it. Otherwise, it is probably NOT your problem but theirs.