Tuesday, July 5, 2011

Stuck in Virginia



Every time I get my heart set on a house, something always happens to mess it up. This time we waited until everything looked like it was a done deal with my buyer. Let’s call him Kip. Kip was pre-approved, his buyer was pre-approved, plus his buyer didn’t have a house to sell so we didn’t have to worry about that. Kip’s buyer had already done the inspections on Kip’s house and everything was good there.

I even called the loan officer myself. He said that with Kip’s 20% down, one year’s worth of mortgage payments in escrow (because of relocating and having to start his business over fresh), his good credit and loan-to-debt ratio, there would be no problem. He said Kip was “strong.” The last thing I did was wait for Kip’s buyer to get his mortgage commitment. I covered Kip. I covered Kip’s buyer. Then we went house hunting. We looked at the nuclear reactor house, we looked at the house on the highway, we looked at the house that even I would set a match to.

The Alloway house was funny. The Alloway house was the very first house we were interested in back in the winter when we sold the house the first time but we never went to look at it because it was quite a bit over our price range and the listing agent said the owner wasn’t negotiable. She called it a thorn in her side and said she’d taken dozens of people to see it but he wouldn’t budge a penny. He wanted close to three hundred thousand and our price range was low 200’s so no sense going. But now, lo and behold, it was down to $249,900, plus a new septic tank had been installed. Sometimes things are a blessing in disguise! Our new agent happily took us to see it.

I can’t even go into telling you about it. I’m too upset. By the time I posted the last story about house hunting and was getting ready to tell you about what we got, it’s over. After everything I did to micromanage the deal, all the checking and double-checking I did, after everything I did to make sure everyone was doing their job and no one was leading me on to believe that my buyer could get a mortgage when he couldn’t, the deal fell through.

I found out the day I found out my father passed out on the kitchen floor, woke up vomiting blood, and got himself to the hospital by crawling to the phone and dialing 911. He’s okay now but this is why I have to get home! This is it in a nutshell!

I’m starting to think I’m stuck in Virginia. No matter how well-priced my house is, no matter if I keep selling it over and over again, no bank is going to lend anyone any money to buy it. We gave them all that money to bail them out, and yes, I understand that they’re cautious now and they should be, they shouldn’t have been lending people money for houses they couldn’t afford in the first place. But I keep bringing them buyers who can afford my house and it’s a good house, priced under the appraisal, and if these people can’t get loans, no one’s getting loans. The bank is sitting on all the money and foreclosing on people’s property—they’re like the king—they’re keeping it all! No wonder why the economy is still at a standstill….

The banks aren’t the only bad guys. You’ve also got the henchmen. That’s the lawyers. This is how it all played out: Kip’s buyer learned ten inches of Kip’s backyard was in one of FEMA’s newly designated flood zones and would require flood insurance. Supposedly Kip wasn’t aware of this. Kip’s buyer’s lawyer advised him to ask for more money off the house to “remedy the situation.” I can just picture what he said. “It’s a buyer’s market! You can get another twenty grand off the house for that!” Everyone was happy up until that point, including Kip’s buyer, a first-time home buyer who loved Kip’s house, but was, naturally, afraid to cross his lawyer, and his parents, who were hovering during the entire process like a new mother over a preemie in a crib and were now nodding their heads vigorously because they had such a good lawyer.

Kip said no; he couldn’t afford to give any more money off the house because then he wouldn’t be able to buy mine. I offered to give him another five thousand off the price of my house and the real estate agents offered to take less of a commission to help him make the deal happen. The real estate agents even got the seller of the Alloway house to contribute five grand. Then it was a roller coaster ride. One minute Kip and his buyer came to an agreement, the next minute they didn’t. It was on, it was off, it was on, it was off.

Pretty soon I’m going to be in the hospital with a bleeding ulcer just like my father if this keeps up.

Finally it was on. But then, even though we all kicked in money, Kip still had to lower the price of his house to satisfy his buyer, and now he didn’t have enough money for the 40% down payment the bank wanted. Yeah, if you’re sharp, you caught that. First the bank told us 20%. Now it was forty. I couldn’t believe it. I specifically discussed this with the loan officer myself in the beginning of this process because I didn’t want what happened with my last buyer to happen with this one—the bank leading us all on. But now 20% wasn’t enough. By the time I thought it was safe and bought a house, 20% morphed into 40%. Kip only had 35%. Plus Kip learned that the interest rate on the loan was over 8%, double the going rate.

So the deal is off. And now we are probably going to lose the Alloway house because I was bidding against someone else who wanted it and the reason the seller accepted our offer was because we assured him it was a done deal down here, we were closing, everything had gone through and all we had to do was pack. I suppose there’s a chance the other person who wanted it found another house. Or maybe he won’t be able to get a mortgage the way the banks are holding on to the money. Maybe a miracle will happen and I’ll sell my farm to someone else who actually can close before the Alloway seller finds someone new. I have been getting action. Someone is doing a drive-by right now as I write. I even have someone who came right out and said he wants it but can’t buy it till August when his divorce becomes final.

In the meantime, I can’t even tell you about the Alloway house because I’m so upset.

20 comments:

Tammy said...

Debi - I am so sorry. Don't know what else to say. I had been watching on FB and I, too, thought this looked like a done deal. .... Jeez.

I am glad your dad is doing okay. Another scare - not what you needed.

Grey Horse Matters said...

I feel so bad for you. You are having the worst luck with this buying and selling. I'll just keep my fingers crossed that something works out quickly for you and you can still get the house you want.

Glad your dad is okay. That's scary.

Chris said...

Bummer! Let's hope there's a silver lining somewhere.

zenmama said...

I hope your dad is OK, what a scary thing for both of you. I am stunned by your predicament. Though I never got to the closing stage, I have encountered the new rules for buying homes with land, or heaven forbid a barn. My husband and I learned that income and qualifying were the least of the problems that could crop us and we backed off our search.

I see the banks flourishing with huge earnings reports but nothing coming through them as lenders.

Sorry for ranting, I am furious for you. Furious.

qhgirl said...

I'm curious.. are your buyers just going to banks for loans? Generally, I have found that mortgage brokers are a better bet since they may be able to have multiple sources of financing.

This certainly is frustrating.. I is a really pisser that the banks took all that tarp money and are just sitting on it. The only loans they seem to make are over guaranteed. We got a small business loan that is guaranteed by the US Govt.. and our home AND the business property.. Probably secured by 2-3 times the amount of the loan! It's ridiculous.. I really didn't want to use the house.. the business asset was worth the loan amount.. but even though it was govt backed (if we defaulted to the bank.. they still would get paid by the govt).. we still had to go through all those hoops.. oh and had to prove that we had put something like 20% of our own money into the business.. it's a wonder how anyone can go into business any more!.. or buy a house! Unfortunately, the FEMA thing is a knee jerk reaction to all the people looking for hand-outs to save them when things like katrina happened... so now "everyone" has to buy that insurance (if you want a loan that is)... The govt wants to "legislate" common sense.. and it ends up hampering everything...

Sloan said...

Tell me you're joking.

Gilly said...

Oh you poor thing! (((hugs)))

Get that divorce man over again and tell him to hurry up his divorce! August isn't far off now.

US Banks sound a real pain in the ****

Leonora said...

I'm sorry for this horrific roller coaster ride. You're right, it's no wonder our economy is in this state. I really hope you guys get a break soon. And my thoughts are with your dad for him to get well.

CountryDew said...

This is terrible news. I saw on FB that you were having trouble and was waiting for an update. What a horrible thing to have to go through - again!

I am glad your father is okay.

Jeff said...

40%???? What kind of bank makes that kind of requirement? And 8% for a loan rate? When 30 year fixed mortgages are advertised at less than 5%? It doesn't sound as though "Kip" has good credit.

Greener Pastures--A City Girl Goes Country said...

Thanks everyone. I appreciate it.

Qhgirl, how do I actually find a broker? How do I tell the difference between a broker and a bank? For example, this last "bank" was Farm Credit. I turned my buyer on to them because they are local and the loan officer I spoke to told me he would love to give a loan for my farm and said they give loans on property zoned A-1 all the time, etc.

qhgirl said...

I am going to give you the name/company that I worked with in Richmond

Rob Roland
Benchmark Mortgage
804-673-1900

He helped my ex husband and I get financing many years ago.. Sarina Everett was my name at the time... but he was really good.. and I remember the process was not too difficult. I know that times are "different" right now.. and we weren't necessarily buying property with acreage.. but he was very professional.. and did a very good job for us. Hopefully he can give you an honest, helpful assessment of your situation.

Claudia Condiff said...

What a flipping nightmare!!!!!
What are the spirits telling you girl???I am so confused...
Breathe deep..

you sell house said...

I really didn't want to use the house.. the business asset was worth the loan amount.. but even though it was govt backed (if we defaulted to the bank.. they still would get paid by the govt).. we still had to go through all those hoops.

Beth said...

Lord have mercy, Debi...this house-selling thing is a rough business. I'm so sorry you're having to go through all this---I just hope and pray that somehow, all this will work out for the good in the end.

Sweetflutterbys3 said...

I am so sorry Debi! Gosh, what a nightmare. It's hard to believe that this economy is so controlled by the same banks that helped drive it into the ground. UGH!

I am glad your father is ok.

Tanya said...

Oh Debi, I just don't understand either and it must be so frustrating to have sold your house TWICE and the deals fall through....I guess you just haven't found the right house yet.....so very sorry about your dad too, that doesn't help to be worried about him and stuck here...have you tried that st joseph house selling trick? at this point everything is worth a try!

Gail said...

Blessings, there is a reason for all this, but it sure is frustrating!

Peggy said...

I read this post with great interest. So sorry this is happening to you. I want to say something pity, positive and uplifting. But.... I'm just so pissed off. Pissed at the banks. Pissed at the deplorable behavior of Congress. Pissed at the greed in the country....... I better shut up.

Long distance hug to you, sweetie. Please take care of yourself. A lot of people love you.

Peggy said...

I meant "pithy" not pity. But you probably got that. :)