is this allowed/"etihcal"??

I will try to make this as short as possible.

Me and DH found a house we really liked a week after looking. Its a short sale so we decided to put an offer in and continue looking since i know short sales can take a while.

We get a call a week or so later that the owner accepted the offer but before the bank will look at it and decide if they will take the offer we were told we had to go into contact. I was a little hesitant to be locked into a contract without being able to back out for at least 90 days (or whatever it is)
So before i went back into contact i wanted to see the house again.

It took 3 weeks to finally get back into the house cause the owner is renting it to 3 people (which i know are not leagal apartments) and he wouldnt show after 5 and me and DH both work and he had to clear it.

After finally being able to see it and not even being able to access the basement the second time we decide to go ahead with it. We conituned to look during the 3 weeks and nothing compared to this house for the money we want to spend.

So we set a date for the inspetcion ; the day of the inspection 2 and half hours before we had to be there the inspectory called my RE agent (we got the contractor thru him) and tells him he throwing up and sick and cant make. My REA calls the other guys REA leaves a message saying we have to reschedule she never got the message.

So they showed up and we obviously didnt. Homeowner is now pissed cause he closed his buisness down and says he wont meet with us again

i am so upset i WANT this house. i know everyone is saying just walk away its just a sign on how hard its going to be but we keep looking and nothing is comparing.

I told our REA to call and try to get us back in. He told us the other REA has not returned his phone call.

So here the is this allowed/ethical. I want to call the guys REA myself (i have not told my REA that i want to do this) to see if i can get a hold of her and talked to her and ask what the problem is. IS this ok to do is it not a good idea??

Message edited 6/28/2012 9:02:39 AM.

Re: is this allowed/"etihcal"??

It's typical to have to go to contract on a short sale BEFORE the bank approves the deal. The bank usually wants to see a contract before they will consider the offer.

As far as the inspection issue - is it the seller who is annoyed and not allowing access for a second inspection, or the listing agent? I can see the seller being a bit annoyed in that scenario, but it happens, and if he was motivated to sell, I would think he'd make the house available again. One issue with short sales is that sometimes the seller is not all that motivated to sell -- they would often rather keep their house, and with the slow judicial foreclosure process, they can probably stay for quite some time even if they can't afford to pay the mortgage. You really want to make sure a seller is cooperating with a short sale because they need to give a lot of documentation to the bank. If they are not cooperating, it makes a potentially long, uncertain process even more of an uphill climb.

If you really want the house and want to get the ball rolling, I would consult with your attorney on this and figure out your options. If the listing agent is the obstacle, you may have better luck having your attorney contact the seller's attorney (assuming you know who the seller's attorney is). But you could always go to contract without having the inspection done (with a contingency clause that it's subject to the home inspection).

As far as you talking directly to the listing agent -- Is your agent your buyer's agent? If he is representing you as a buyer's agent, then it would be unethical for the listing agent to talk to you directly outside of your agent's presence (since you are someone else's client).

If you did not sign with your agent as a buyer's agent, you could talk to the listing agent and he can talk to you, but I don't think it's in your interest to call him directly. His loyalty is to his seller; the listing agent has no obligation to you. And you risk alienating your own agent by "cutting him out." As a listing agent, if a buyer comes in with another agent, I expect the other agent to work on the deal, otherwise, why else is that agent involved? Why not talk to your own agent and discuss your strategy going forward? If you feel you can't trust your agent or that he is not getting you results, then perhaps you shouldn't continue to work with him going forward (if this house doesn't work out). And again, if you don't want to rely on your agent, then I'd go to your attorney.

Re: is this allowed/"etihcal"??

thanks for the reply Christine.

I havent signed anything with my agent and im not looking to cut him out im anyway i just figured if the sellers agent is ignoring him maybe i can contact them and just find out why. I dont think its fair that the seller is punishing us over something we had not control over. I get he is annoyed but still

From what was told to my REA the seller has submitted all paperwork already so thats why i had somewhat of a good feeling about this.

i didnt know i can go into contact without an inpsection maybe i will consider this approach.

Do you know if its even legal to rent out the house while in short sale?

I am so pissed that its taking everyting in me not to report him for the illegal apartments (upstairs and in the basement)

Re: is this allowed/"etihcal"??

At this point, I would consult your attorney.

But of course you can go to contract without an inspection. You have the right to an inspection, but you could always waive it, which I would NEVER recommend. But you can always go to contract and put a clause in that it's subject to an inspection. It's better to do the inspection before contract, but in this situation, it's different. A lot of buyers don't want to lay out the $ for an inspection before they know if they will get the house (because a contract in a short sale is not as solid as a traditional contract... with a short sale, it's a contract "subject to bank approval").

As far as renting it out, the seller still owns the home, so he can do what he wants with it, including renting it out. But as to whether the apartments are legal, a basement apartment definitely is NOT. And if it's a one-family house in Nassau, then the apartment wouldn't be legal (unless the owner is a senior citizen and got a permit).

I wouldn't report it. First of all, perpetuating bad feelings on a deal is never a good thing... better to work on productive solutions. Plus, it's not like he's going to get in "big trouble" for having an illegal apartment. The main consequence would be his tenants would need to leave (and he'd lose their rent $), and then the house will be vacant. And usually occupied houses remain in better condition and are better maintained than vacant houses. So not sure it really helps you.

Hang in there!

Re: is this allowed/"etihcal"??

Re: is this allowed/"etihcal"??

The first thing that stood out to me in your post is that the owner is renting it out to 3 people. From what I learned when househunting, is that if you purchase that house, those three people living there do not have to leave, they could be squatters. The owner might be having trouble getting the tenants to leave. So you might have more trouble on your hands trying to get those three to leave in court.

I learned to walk away from any house that was being rented out illegally.

Re: is this allowed/"etihcal"??

Re: is this allowed/"etihcal"??

Re: is this allowed/"etihcal"??

Something that jumps out at me is that you say its so much house for the money. Can it be that they just listed unrealisticly low. The bank won't accept something too much lower than the appraised value and it may be a deal that will never go through. What does your agent think similar houses are selling for.
From what you posted I would abandon this one and move on!