Bait and switch? Please help.

[Anonymous]

I recently made an offer on a short sale home. The offer was for $95,000 with a home warranty, gas line warranty and $3,000 of my closing costs paid. The sellers and I went back and forth a few times to agree on this. Now it goes before the bank. The bank takes over two months to review the purchase agreement and GFE. Finally they come back and agree on the price, but say they will only pay 3% of the closing, which I agree to (it's only a difference of $200 or so dollars from the original $3,000 I asked for).

We are now 1 week and two days out from closing and the bank decides they will not pay for the two warranties, which come to $520. I'm upset, but I'm wondering at this point what I can do. Before I can even argue for the warranties, the bank comes back the next day and says they are now $2,471 short of making the sale. In other words, they are no longer paying my closing costs in addition to not paying for the warranties. This all a week and one day now before we are to close. Did I mention the bank I'm going through for the loan is the same bank approving the sale? Further more the bank knows I have already put in notice at my apartment and have to be out two days after closing, secured movers for the move and approved time off of work to move. How is it a bank can take over 2 months to approve a sale and they never check the numbers to make sure the sale price will cover costs? I believe they approved the loan knowing full and well once it went through the titling company it wouldn't cover their costs. This then becomes an excuse to later raise the price.

Can they get away with this? I'm told by my LO and realtor this is a necessary evil of short sales. The sellers offered to come up with $500 to offset the $2,400 plus $520 for warranties and my LO has offered to lower the points by .25%, which will give me an additional $233. My agent has only offered to lower her commission by $100 and I have yet to hear back to see if the seller's agent will chip in any money to get the deal done. What can I do at this point? I will be homeless in a week.

[renaboo01]

I know exactly how you feel right now. I have went through something similar with the short sale I am purchasing. And to tell you the truth, there is really nothing you can do about them raising the price, except to walk. I do believe you will be out of money by doing that though. (not sure, ask your realtor) I also have to be out of my apartment by the end of the month and have had to reschedule my move three times so far. I wish it was more that I could tell you, but just know you are not along and I will pray for you that things work out.

Rena

[Anonymous]

Thanks, I guess (?) it's reassuring I'm not the only one going through this. Yes, you're right I will be out of money. I have paid for the appraisal/loan application fee, a home inspection, a termite inspection and given earnest money. This is how they get you! My realtor does say I should get back the earnest money, but who knows at this point.

[Anonymous]

The bank probably hit another "anniversary" date on the loan that they had to make some payouts on (taxes or something) and are unwilling to have paid that and still honor all the concessions.  Once they agree on a "price" contractually for the shortsale, they don't expect to have to put any more money into the property.  Also, it is not generally acceptbale to expect the realtors to eat commissions to make up for that sort of stuff.  If anything, they work alot more on a short sale.  It is one thing if they offer on their own accord, but you shouldn't request it.

Good luck getting it all sorted out. 

[Anonymous]

Once I agree on a "price" contractually, I don't expect to have to put any more money into the property either. I'm not entirely sure I understand your "anniversary" date theory, but I'm not sure that is what happened. If you go back and look at the agreement paper from the bank and run the numbers they don't cover all the closing costs on the seller's side. The seller's agent had privy to this information and choose either to ignore it or just didn't figure out how much the sellers needed to get out from under their loan. The bank also knew when they agreed to the figures it would not cover their costs, yet still told me everything would be fine and covered. So, in my opinion and from what I understand there was no more money added or payouts made, the original deal the bank agreed to just didn't cover all the costs, yet they lead me to believe it did. This is why I'm upset. I'm being told the numbers never changed, there was just a "mistake" that several people over several months didn't catch and now I have to pay for it knowing I really don't have the option of just walking away.

[Jazzzy]

All of this agreement must be in writing, isn't it?

You have an agent, right? Get out the ageements and go through the dollar amounts line by line. Add and subtract the numbers. There are things you agreed to pay. There are things the sellers agreed to pay. There are things the bank agreed to pay.

Tell your agent that you want to do this on Monday morning.

See what the numbers that were agreed upon tell you. Then, tell your agent that you will come to closing prepared to pay no more than you agreed to. Hand this problem back to your agent.

[Anonymous]

the only way I can see the bank being able to change it is if the process took too long.  In that case, and with another month of expenses onthe house comign into play, I could see tha bank changing the deal.  Of course they could only do that if there was a timeline built into the contract and that contract expired.  That is what I was trying to say in my first post but failed to do so miserablyy.

That said, short sales are a tough one and the ban pretty much controls every aspect of it.  It also may be that they are only willing to "loan" a cretian figure against the house and that is why there is a $ difference now.  But if that was the case, it should be your LO calling you with this info, not the seller.

Are you using an actual LO that works "for you" on this deal, or since the bank owned the house are they handling all of it.  This could be the problem as well.  When the bank that has the listing is used for the loan, you can run into the problem that there is not alot of "buyer's" representation.

[DallasLoanGuy]

if you are under contract and they have signed the contract with those terms in there. they MUST follow the contract or you can sue them..... and win!