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The house that just won’t quit.
September 15, 2010 by Esi · 14 Comments
I like to think I’m very good at problem solving and rolling with the punches, but 2 closings I had recently tested me in ways I’ve never been tested before, but I’m going to focus on one since, I’ve blogged about it extensively, here, here , here , here and here.
A deal that I had been working on for 3 months finally got a clear title. As a summary, there were 3 people on title; one was deceased, one was disabled and the third (Sarah and her husband) was trying to sell the house. In order to have a clear title, a probate case had to be opened for the deceased which typically takes 3 months or more and the person that is disabled needed a conservator ordered by the court to make his decisions and sign title documents and in order to do that every family member had to give up their rights including one of the siblings in jail. After setting up the closing date which was a challenge in itself, everything was expected to go smoothly. As soon as the phone rang on the closing day, I had a big ol’ smile on my face because I thought it was my title guy calling to tell me the money was in my bank account, but it was far from it. It was Sarah calling to ask me to pay the closing cost. What the @#$%&.
I took a deep breath and told her according to the contract, “seller and buyer pays their respective closing cost and fees” which means they get to pay their own closing cost. The back story is during the negotiation, Seller told me the least they would accept will be $11K and I said if they accept $10K, I’ll be willing to pay their closing costs. After a lot of back and forth, they refused and insisted on 11K which is a great price, so I agreed. They claimed that it was a misunderstanding, but I wasn’t buying it because I made it clear to them that they were going to pay their closing cost and when I drafted the contract, it clearly stated that they were going to pay their closing cost. I felt like the seller was trying to pull a fast one on me so I decided to play hardball. I said according to the contract they will have to pay their closing cost and their response was well they are not going to sign the papers and were prepared to walk away. My immediate response would have been, “go pound sand”, but I had to keep it professional, so I said “okay well I honor my contracts and I have worked hard with you to help you sell your house and if you feel good about walking away then so be it” and that was the end of the conversation.
As soon as I got off the phone, I couldn’t believe what just happened. I thought about all the hard work that had been put into this deal. Get this, this was a JV deal. I was selling this house through another wholesaler who has this new buyer she is trying to impress and the buyer has been patient for 3 months while trying to get a clear title. What was I going to tell this wholesaler and her buyer? There was no way i was going to tell the buyer to pay the closing cost now since it’s not part of the contract, and oh my title guy has been through hell dealing with title issues, will I just let them walk away with an egg on his face? And oh I had invested about $750 in this deal to help them pay some of their legal fees and since they’ve just shown me they have very little integrity I might have to sue them to get the $750 “EMD” I loaned them. Afterall, when I asked her how I was going to get the $750 after she threatened to walk away she said I don’t know, I don’t have a job right now. @#$%&@$%! After analyzing the situation, it was important I keep a good relationship with all involved and I realized the only way I could get my money back was to close the deal. So I swallowing my pride and called back to ask my title guy what the closing cost was and he said $820. After giving me the breakdown, I asked to speak to the seller who were still in the office by the way. I told them, I normally won’t do this, but there are too many people involved to back out now and I was willing to pay only part of the closing cost and they agreed. So I faxed a contract stating that my company was going to send them a check after closing.
So yes, I blinked and although I sent them the check, I struggled with my decision at first but I realised I did the right thing. I make business decisions everyday and based on the present circumstances I try to create a win, win, win for all. My consolation is even though I was $670 short, I still kept my integrity and my relationships and it’s up to the seller to live with her decision. Needless to say, I got an email from Sarah afterwards offering to write a testimonial.
Today, I got a call from the buyer saying he doesn’t have the keys to the house 2 weeks later even though the seller claims she mailed the keys. Here we go again, this house just won’t quit me. Seller told me several times that the house was cursed and even though I dismissed those charges I’m beginning to feel that way.
Wow, Esi, amazing! I recently emailed you a few days ago on how to handle probate situations. After reading all the headaches, hmmm, I think I may just stick to foreclosures/short sales and wholesaling.
You can have the probates, lol…
Lol SSD. It’s not that bad. Most deals have hiccups along the way, but this ate the cake. Still give it a try, just be ready for anything. I’ve learned more on this deal than all the “smooth” deals combined
Even though it was not me in that situation I still got that angry feeling when you have to swallow your pride. It was yelling “Don’t give in!” I’m sure you’ll be happy you did in a few weeks, but I’m about as stubborn as they get so I don’t know if I would have been able to do what you did
Scott Costello´s last blog ..Everyone Raves About Bandit Signs- Should They
Hey Scott, I know what you mean and it was a very hard decision. If I didn’t have others involved for that loooonnng, I would have walked away from the deal in a hearbeat. After 3 months of the grueling process, I just wanted it to end it and it was important to keep all the relationships i had developed over that period. Also, I knew i would get the $750 I invested back, so I just had to compromise and it will be up to them to live with themselves.
Wow, Esi. Those are hard decisions to make, particularly when people are putting you in a corner and there are others involved beyond yourself. Your new buyer may be changing the locks this week.
Shae´s last blog ..4 Simple Steps To Getting Private Money
Tell me about it Shae. I kicked myself for a while, but I had to analyze the situation and realized I couldn’t have done it any other way. Could I have walked away from the deal? Sure, but I would have walked away from all my relationships too. Yeah, if I don’t hear from the seller today, I’ll ask my buyer to change the locks.
You did what you had to do….even though it was hard. That’s integrity.
Shae´s last blog ..4 Simple Steps To Getting Private Money
FlippingMom,
That is a great story. THE DADS have had several closings like that….it becomes something to expect after a while. Not expect everytime, but expect it will happen again.
We have not ever had to deal with the probate court issue….I don’t look forward to that one. I prefer to be in/out within 2 to 4 weeks, so I will not like that one at all.
Thanks for the integrity you exhibited also…..with all the bad raps we get from the outside world, we need more people like you in our biz.
Have a great day flippin’.
——-
Respectfully,
Jack
PS – Have you grabbed your free eBook yet? If not, then go here now to become a DADS fan and get your FREE copy today>> http://www.facebook.com/TheDads
Thanks for stopping by and leaving a comment Jack. I always anticipate and prepare for potential issues that could come up throughout the process, but this was a first. Probates can be a challenge just like other forms of getting leads, but some people swear by it so to each it’s own.
Hope to see you around. and have a great day flippin’ too
WOW. Esi, as I was reading this i actually started to get a little irritated because I was the one who told you to help them out with there EMD. I still feel like you made the right decision but its hard to swallow the fact that there are not many good hearted people in this world and they could give 2 s%#@s about you or me. They are just concerned on self preservation. Fortunately god judges the heart and you have a good one.
On another note… GO POUND SAND! I luv that one.
I think I will use that the next time someone pisses me off. HA!
Keep Crushing it Esi!!!!!!!!
Hey Erby, yeah i remember having a conversation with you about this deal and contemplating whether i should do it or not. I was surprised too at the way they behaved at closing, but people are unpredictable sometimes and i just have to accept it and anticipate that these things do happen. Thanks for the compliment.
Go ahead and have a fields day with it, lol.
Wow Esi,
You definitely made the right decision! Thanks for sharing. This another great example of the integrity that Real Estate Investors like you bring to the marketplace!!!
Angela Benjamin´s last blog ..I had a lot to think about…
Thanks Angela, I appreciate that very much
Esi, Wow! Sometimes we gotta do things we normally we wouldn’t do for the good of ALL involved (and when I say all in this particular case I was referring to you and your end buyers
I’m glad it all worked out in the end though and kept your integrity in tact. umm did they get the keys yet? lol
Carey_PA´s last blog ..ATMs and Private Money aka Buy ATMs with No Money