Dispatch: Home buyers walk away
Peter Arrabal has been sharing his tale of trying (and trying and trying) to buy a foreclosure with girlfriend Karen Parlee. Now he presents his final -- or at least final for now -- dispatch from the home-buying front:
We bailed out. Maybe we wimped out. We finally backed out. But no one seems to be able to help us out.
As documented last month, my girlfriend (who, as of New Year's Eve, can be called my fiancée) and I were attempting to buy a townhouse to be closer to our jobs in the D.C. area. We needed relief from our two-hour commutes from Ellicott City.
Through three months, we had submitted four offers and been rejected four times. The fifth time worked, or so it seemed.
"A routine search of Bankruptcy records revealed that the prior owner declared a post foreclosure bankruptcy," they said. We don't even know who said this, because all communications come through the selling agent and are unsigned. Mysterious? Yes. Shady? Absolutely.
We asked them to explain what that meant. What was a post-foreclosure bankruptcy, and what are the repercussions for us and the bank?
"Please inform the purchasers that a routine search of Bankruptcy records revealed that the prior owner declared a post foreclosure bankruptcy," they said. Nothing else.
A few weeks later, the selling agent warned our agent that we had to submit an extension addendum to the contract, because otherwise, the contract would expire on Dec. 11, 2009, and the sellers could walk away with our deposit because we failed to close on time.
Yes, it was our responsibility to extend the contract despite the fact that Wells Fargo didn't own the house they had listed for sale.
We offered to extend the contract for 14 weeks.
"It is our policy not to extend contracts more than three weeks at a time," the e-mail said.
Really? Every three weeks I have to offer to extend the contract, on the hopes that your lawyers manage to clean up this mess?
Enough. We could only put up with their shenanigans for so long. We could only commute two hours each way for so many weeks. Our patience and spirits were worn thin.
And so we bailed out. We drew up a withdrawal from the contract and requested our earnest money deposit back. The original contract called for a $6,280 subsidy from the seller to cover closing costs, which included a home inspection and appraisal, for which we had already paid nearly $1,000. In the withdrawal addendum, we requested reimbursement for those two items.
We got a check in the mail for the earnest money deposit. It may as well have come with a picture of someone's middle finger regarding the inspection and appraisal request. They never rejected that request, they just ignored it completely.
What did we have to show for five months of trying to "realize the American dream of homeownership," as those National Association of Realtors radio spots inspire? A handful of wasted weekends, a few reams of wasted paper, a negative balance of $475 on an inspection and $501 on an appraisal. And we still had that two-hour commute.
If insanity is truly to do the same thing repeatedly expecting different results, then we are 99 percent insane.
Driven by the other 1 percent, we just signed a lease on an apartment in Bethesda, located five minutes away from my work. There were no mountains of paperwork, no waiting, no loan officers. I signed my name a handful of times, wrote a check, and got a pair of keys to my new home.
What did we learn?
1) People trying to buy a foreclosed home face significantly more potential pitfalls than with regular sales.
2) The banks who own these home are often incompetent, irrational and difficult to deal with.
3) This kind of stuff makes absolutely no sense to the normal, rational person. However, when presented to a lawyer or real estate agent, this scenario somehow makes perfect sense.
4) The lawyers always, always get paid.
5) There is not a single incentive that could convince me to ever consider using Wells Fargo in any capacity.
I feel very bad for the agent who tried to help us with this. She worked from August through December trying to help us buy our first home, and ended up collecting no commission, through no fault of her own.
So, for the next year, we'll be paying a monthly rent that's more than what our mortgage payment would have been. There are no for-sale properties on the market right now that meet our criteria, so we'll wait for the spring/summer/fall inventory to come back and bring us some options. (Apparently, no one wants to move during the winter.)
Hopefully, the next sellers we try to deal with will actually own the home they list for sale.
Thanks so much, Peter, for sharing your story of frustration. Much better luck to you on your next go-round with the housing market.Stay tuned for another prospective home buyer's dispatch. If you'd like to share your own experience of buying, selling or renting, email me at jamie.smith.hopkins(at)baltsun.com. (And no, it doesn't have to be a can-you-believe-this situation.)