As many of you know, we purchased a condo in Pontiac back in August, and we really like the subdivision that the condo is in. We’ve been scouting this subdivision ever since and we’re looking to purchase more of the condos in there to hold as rentals. So as we’ve been doing lately, we drove through the neighborhood, and last week we found a newly listed condo just a few doors down from the one we purchased.
So we made the call to the realtor and found out it was still on the market. The asking price was $23k, and we decided to put an offer in on the property at $15k. A day later we got the following back from our agent:
Seller countered: $22,000, close on or before 12/20/2010, adding 100.00 per diem. Please advise. Thanks.
Now, you’re probably wondering just like I was what the heck “$100.00 per diem” meant. My first thought was maybe they were going to take us out to lunch if we accepted their counter offer. As you might imagine I was a little less than pleased when the realtor told me it meant that for every day past December 20th that we delayed the closing, the bank would charge us $100. My next thought was, well, we can close in 2 weeks…do we get $100 credit for every day before the December 20th that we close? Again, my hopes were dashed. No lunch, no credit…needless to say this negotiation was not going well.
So we countered back at $17,500 and indicated this was our highest and best offer…take it or leave it. Unfortunately the bank misunderstood our offer and countered back at $21,000. So we again informed them that $17,500 was our highest and best offer…TAKE IT OR LEAVE IT.
A couple of days went by and we thought the deal was pretty much dead. In fact we were working on three other deals, and then surprise, surprise, we received this email from our agent:
Just Sign what you need and I will do the rest…
The agent had attached the addendum the bank had provided and was looking for us to sign the contract with the new addendum. Having seen how this negotiation had gone, let’s just say I was a little suspicious of the bank, so I sat down and started to read the addendum. As I read through it, it contained the most of the standard boiler plate clauses, but then I got to the clause about prorations. The clause again was pretty much boiler plate stuff, but then right at the end of the clause they had the following statement:
Seller shall not be responsible for homeowner’s association assessments that accrued prior to the date Seller acquired the Property.
Now quite frankly I was a little perturbed at this. The bank was not upfront about this at all, and this statement was buried in the addendum. There was no statement about how much was owed to the association, just that the seller would not be responsible. So I read on…
There was more boiler plate fair, and then I came to the clause about transfer taxes / tax stamps. The seller added a clause exempting them from paying transfer taxes and tax stamps. Again, there was no estimate of what cost they were passing on to me the buyer, and it was a backhanded attempt to win back some of the money they had conceded when accepting my offer.
Needless to say, I have not signed these documents. I spoke with my agent, and asked her to talk with the selling agent about these clauses, and quite frankly she has been less than successful at obtaining a clear answer from the selling agent. The selling agent said that these things are normally taken care of by the seller and it should not be an issue.
Well, there’s just one problem with this….THAT’S NOT WHAT THE CONTRACT SAYS!
So this is pretty much where we stand at this point on this deal. We are not going to be moving forward on this deal because quite frankly we have completely lost trust in the seller. If they are using these tactics to extract money from us, what else about this deal aren’t they telling us about? We’re not going to get involved because quite frankly something stinks.
So the point of this blog post is to remind you to read the fine print on your real estate contracts. In this negotiation it was clear that the seller was going to use whatever tactic necessary to extract as much money from us as possible. You would like to think that every negotiation partner you deal with will conduct themselves with a good moral compass, but that is probably just too much to ask for. So please, read your contracts…