Learned The Hard Way

There are many facets to buying a house. I am not a professional home buyer, nor do I pretend to be. Back in 1999, we decided to purchase a new home, so, in good faith, we contacted the agent who sold us our prior home and said we’d like his assistance finding a new home. He immediately pushed for the listing on the current house and since he was so helpful during the purchase of it, we had no problem with that. We’ll call him Jim, because that’s his real first name! After a few questions, Jim put together a list of properties to see. All of them were just above our range and nice enough homes. None really fit our needs. One had a yard that was entirely a pool, another had three baths that needed to be redone and we just finished a year of work on the existing house. In short, we were in no mood to rip out all of the bathrooms. This house however, had 4 fireplaces in the basement. Something I had never seen before and three years later had doubled in price. Should have bought it.. but that’s not the lesson here.

 The lesson begins with the next house. It’s a beautiful Tudor owned by a doctor and is out of our range. When I say beautiful, I mean old-world beautiful, with redone everything. We go into the house and my wife just about passes out. Talk about the lack of a poker face..  :0) . They’re not ready to move and an open house is scheduled for the following weekend. We love the house, so we call the agent and tell him we’d like to make an offer. We meet at his office and sign a binder and provide the customary good faith check.  We are to meet at the house later that evening and the agent is to present the offer- this is his duty.

Fast forward a few hours… Jim meets us at the house and we begin discussing the offer and really hit it off with the owners. They agree to the price and didn’t really want an open house anyway, so this saves them strangers walking through their house. Here’s where the fun begins. Jim states, “ok, you have a verbal binder”. Well boys and girls, there is no such thing as a verbal binder in the sale of real property and I state this to the owner and Jim. The owner looks to Jim and believe-it-or-not lies stating this is incorrect. I inform him of the law classes I have taken and bet him an obscene amount of money that he is lying. He says he left the binder at the office along with our check. I say “go get it or pull out another one and I’ll give cash with it”.  Jim causes a scene, then calls an assistant at the office and tells her to bring over another one. We fill it out and they sign along with $100 in cash. We leave the house feeling uneasy because the greedy agent is pushing for the open house the following weekend. ALWAYS FOLLOW YOUR GUT INSTINCT. IF YOU FEEL UNEASY ABOUT SOMETHING, ACT ON IT.

You can probably guess what happens next. We get a call after the open house with some bad news…. There have been 4 full price offers and two over full price- all cash. The owner of the house has been persuaded by the agent (and the extra cash) to terminate our binder- showing a great deal of bad faith- and take one of the higher amounts. I threaten to sue them both and call my attorney. We wanted the house and were approved for the mortgage and ready to set a closing date before the damn open house even happened. I found out later that once it went to contract, backing out would be much harder for them. Then they question our ability to purchase the house and this was at the beginning of the internet boom and we certainly had the ability to purchase it. I am livid to say the least. They say that karma has a way of working things out and the owner calls a few days later to state that the deal fell through and that he wants us to have the house. We are relieved to say the least. Given the fact that Jim had the listings for both houses, we were in no way going to let him keep our listing after pulling this crap. This is where it gets really ugly. Jim states that if we don’t allow him to keep the listing on our house, he will kill the other deal. One call to my attorney and that was put down fast. Being new to this kind of crap, I wasn’t going to take any chances and paid for the big dogs to take care of him. The entire conversation was relayed to the owner of the new house in writing and he assured us that would not happen. He wanted us to have the house. We got the house, but not without losing some sleep and a few bouts of high blood pressure.

The lessons: there is no such thing as a verbal binder on real property in NY; do your homework before buying a house- have all of your finances in order so that you are assured that when you make an offer you can close; if you feel uncomfortable with your agent, get a new one! Seven years later, it still feels like yesterday and I can see his smug face telling me I have a verbal binder. Karma got him too as the agency he owned failed… Funny how things work.

This entry was posted on Friday, August 11th, 2006 at 1:06 am and is filed under Buying Things. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.