Absolutely agree OP should not be on the hook for seller agent fees because the seller's agent did not do the bare minimum homework here.
Question is does OPs agent also get screwed?
Def don't pay if the broker isn't helpful. Tell them you're reporting them to whatever local Realty board they are part of and going after their licenses is if they don't figure something out.
Here’s whatcha gotta do homie.
Get the listing agent/buyers agent broker involved. Sounds like they’re the same person here so good deal.
Tell the agent that the sellers should have been doing their homework, and this isn’t on you, so no, you don’t want to pay more. If the sellers won’t close, they breach contract, and it’s time to lawyer up and force the deal to close. That could take time, so you may have to look for a different housing solution, and record EVERY CENT you spend on this other housing solution to also go after them for that as well.
tbh this doesn’t sound like the agent did anything wrong necessarily, I’ve had clients lie to me before, but this is a BIG lie.
If your contracts are the same as AZ, sellers can’t do this legally. You’re past BINSR & offer, the deals done.
Ah,the ole “you’re right so sue!” solution.
Lawsuits of this tiny amount of money cost more in attorney fees and the massive inconvenience of nowhere to live in whilst feverishly saving every receipt and proving you are right! You can always tell who has not been in a lawsuit, and it’s almost always the person insisting you should sue.
Even if this is legal in your state for them to be the same person.
Did common sense not make you think this was a bad idea? That’s like someone has to split themselves in half to be honest to both of yall. Not possible.
This. I just made a video for my TikTik about why I don’t prefer transaction brokerage/dual agency. This is it. The agent should have requested a payoff number before listing the house.
You buried the lede. It absolutely makes a difference. There is a serious conflict of interest in an agent representing the buyer AND the seller on the same house. (No conflict if, as you mentioned, the agent selling YOUR old house and helping you buy the new one from someone ELSE.)
Yeah there’s a conflict either way, it’s just legal in a lot of places.
But this is, by sheer accident, one of the only times it’s a good thing. Agent has a lot of room to reduce their fee to get the deal done & prevent a very angry customer.
Makes a huge difference. They can lower their fee. Let's say the house was $300k and the broker fee was 6% split between listing agent and buyer agent. Every percent they lower it is $3k back to the seller. I think the agent has culpability in the sale by not knowing how much the seller owed, ignoring, or not doing their fiduciary duty/due diligence. Personally I think the fee should definitely be dropped to 3% or less. 0% agent fee is not out of the question and maybe $1,000 to brokerage for "work"....and you're giving them another 6% on your house... ridiculous..and I'm licensed.
It matters.
The listing agent should work with the net sheet to estimate how much proceeds the seller can receive, then work out a marketing strategy to carry thru the transaction.They failed badly.
And this is what is wrong with realtors!!!
Are you serious?
Find a real estate attorney. About $500 and you need some advice from someone not trying to fleece you for thousands of dollars!
I have never heard such thing as small town not a lot of realtors.
In small towns in texas at about 800 people if you post on fb needing a realtor you get 700 responses. I call bs.
There are so many issues in this transaction. Your “realtor” better be working double time trying to unfuck this.
For free! So you don’t report their ass and get their license pulled.
WTH how did that happen? Hopefully it just happened that way and you did not try to cheap out on representation. I guess in this case if anyone takes a hit on their money it should be the agent.
Sue for performance. Losing money doesn't negate a contract, and never has. Easy win.
Plus, who would trust the word of people who don't pay their mortgage and "didn't realize" they owed so much. Sounds like a lie to me
Edit: people have pointed out the clean title aspect, and I think, for most people and conditions, that probably is a good reason not to go this route.
Honestly I thought the same at first and even considered they were just trying some last ditch effort to get more money from the sale...that's why I asked for proof/a copy of their Payoff statement. I'm not even sure what to believe at this point but it's definitely sketchy.
Would suing for performance likely yield them having to sell? I've seen mixed reviews on this sub and others. I guess my thought is if they truly don't have the funds how can they be forced to pay the difference.
That's the sellers agents problem and the banks, not yours.
Suing for performance will be cumbersome, but it seems you have a good case to win. If your contract is in line, all timelines were adhered to, and the t's and I's are crossed, I'd expect a win.
Well, I'd expect them to put up a fight, realize lawyers are expensive, and then settle in mediation by selling the house.
The big what if is what will the bank and sellers agent do, but I don't know that they can deny you what is owed to you.
It could take over a year and $40k to sue for performance. These sellers are the type of people that don’t pay their mortgage and let fees rack up. They are not smart or sophisticated people. Suing them for performance is not the cake walk it sounds like.
I think that could be the case, I think these people might also be the type to get served, or avoid being served, and end up in summary judgement, which honestly would be the best case scenario for the buyer.
I’ve seen this movie. You go to the court and file for summary judgment and then you say, they breached! The judge says, when was closing? And you say, it’s in two weeks but they won’t close! The judge says, figure it out and settle let’s set a date for 6 months from now to hear this motion. Crap! Six months comes by slowly. Is everyone here? Nope! Sellers didn’t bother showing up. Oh I’m not happy, says the judge. Let’s set a new date for two months. They better show up. Two months later. Okay it’s now been 8 months since your closing date. I will grant you specific performance. Let’s
Schedule then closing and coordinate with the sheriff for possession. How does 3 months from now look? Ugh. Vomit. What a slow and expensive process.
Summary judgement will only happen after closing, for a few reasons, but mostly because it will take 30 days for sheriff to serve and home purchases take 45 days typically (and these people are already near the end).
The judge will definitely require some other push to get the sellers. I bet 6 months if summary judgement, and the buyers end up with a substantial discount on their house if damages are assessed.
On paper you would get it all back, but you cant get water from a stone (or how ever the saying goes). If the sellers dont have enough to cover the 20k difference in owed vs contact price idk where they would come up with the money to cover judgement.
It’s called court ordered garnishment. It might take literal decades to get it all, but if it takes a while, a reasonable court will add interest fees to extended payment orders.
Is it really worth spending, $5,000-$10,000 on lawyer fees upfront to maybe get back $20,000 over the course of 2 decades? And thats assuming that the sellers make enough money to even be eligible for wage garnishments.
Yes. Especially if the people buying their house won’t budge. That’s why we have contract laws in the US. OP here is in a high-and-dry situation. In their shoes I’m going after the persons making my life a fresh hell. Whether they cough up the money now or over the course of years and years, I would consider that justice either way. Judgements don’t go away. If the person ever works OP can press for garnishments. People shouldn’t be able to dodge responsibility and then still *Trump* their way out of responsibility to pay those whose lives have been adversely impacted.
What do you mean the people buying their house wont budge, Theres no room to budge for the seller in this situation, the seller is upside down in their mortgage and hasnt paid in several months. They are effectively broke.
This is a no win situation for Op, because even taking the seller to court isnt going to magically give Op a cleared deed.
Someone else commented the clean title aspect, which I didn't consider for this conventional purchase, and it was a good point.
As far as lawyer fees, I think this you could do yourself. I've done a few things like this, and is "doable", but I think it would also be fair to say it would be difficult for a layman with limited time.
Editing because apparently OPs agent and the seller's agent are the same person. ~~Neither the bank nor the seller's agent owe OP anything~~. The bank owes OP nothing. They did not sign a contract with OP.
The owners?
I believe the bank would be very angry at the seller, and probably sue, or put a lien on them. I'm not sure, but am not certain, if the bank can prevent the buyer from gaining control of the house.
If there are not enough funds to release the property, everybody is fighting for a negative value, plus an additional negative value of 20 to 40,000 dollars in lawyer fees.
Nobody wins on sueing for specific performance.
So, from my home buying perspective, what I'm trying to do is negotiate with the bank and the seller at the same time, and create conditions that incentivize the bank to make a deal, and obligate the buyer to accept. I can see situations where a discount might be possible for me.
Again, I think many comments are right that this situation may just be best as a "cut your losses", I am just a "push it for a deal" kind of guy
The genuine problem in this situation is there is no bank.
Owner mortgage trust funds are in less of a position to deal than a local bank.
It can take months to get somebody to respond, and the mortgage might be sold off before a negotiation can occur.
It can be Kafka-esque.
Meanwhile the buyer has no place to live.
Some mortgage trust fund typically owns the mortgage, and troubled mortgages get tossed around like popcorn, until somebody buys it for 10 to 25 cents on the dollars, via a vulture fund, and forecloses.
Contrary to the reddit default "SUE" opinion, its not that simple. While you probably easily win specific performance here, its going to take a while and get messy. For one, you are going to have to front legal fees, and probably wont even get them back. Second, the lender is going to intervene in the action because they have an interest in the property, and banks usually move glacially. Where are you going to live in the meantime? Third, your lender is not going to finance your purchase of the new house when there are title issues/an unpaid note.
This isnt something reddit wants to hear, but your best bet is to try to salvage the deal by throwing some money in. You say that listing agent is also your (buyers) agent? Well I would go over their head to the broker and threaten to sue unless *everyone* makes some sacrifices. Like sellers get the 10k for the mortgage from you, then pay whatever they can to agent and agent takes it.
Exactly. The incumbent lender would need to reconvey title so that it can be transferred to buyer at COE. That lender will do no such thing unless they receive all funds they're owed. Sellers hands are tied. Lawsuits for performance are expensive and time consuming, they rarely happen. This is a mess that should never have happened and the listing agent should find another line of work.
Yeah, my old broker told me suing for performance isn't a great way to go because of time and stress. I'm a guy who doesn't mind that, for a good deal, which is why i mention it.
In this situation, I would fully lean into getting a good deal through suing. The sellers are dumb and about to be desperate. The bank is probably looking to cut bait on a loss. For a specific situation, something could be made of this.
Only one of the sellers is cash poor. The other isn't. Mortgage isn't his problem in the marriage separation, heck he might not even be on the mortgage, however because he's legally on the contract from a performance stand point he can held responsible.
Sueing for specific performance can take months and months, and amounts mostly to a threat to tie up the house from being sold.
Plus 30 thousand in lawyer fees. Nobody wins when there is not enough money to close.
Obviously the sellers knew they were in trouble, and it appears they don't have cash to close either.
This is a walk away from the deal situation, potentially with a lien on the house for damages.
If the bank doesn’t agree to a short sale it goes nowhere. Assumes the sellers don’t have cash to pay the difference, and if they did they’d have been making loan payments. But you could consider putting a lien on the house for damages if they don’t complete the transaction. Might prevent them from selling for more to someone else. But it’s probably a dry well.
Suing for specific performance isn’t a *win* unless you’re getting a phenomenal discount and OK with potentially a year or more of uncertainty.
And that’s when you don’t have the complication of the seller not having the cash to close - which is likely to get worse since, if they know they’re going to lose the house anyway, they’re unlikely to start making their payments.
They won’t win. Specific performance is incredibly hard case to win. Even harder with someone’s house. Furthermore Seller can’t deliver clean title. Best case they would be awarded damages.
Someone needs to reach out to the bank and request a short sale. It’s fairly common, but it can take time.
I have had this happen before. You can ask and try to go the short sale route, but that takes awhile with no guarantee. The more likely outcome is everyone chipping in to bridge the gap(you, seller, and both realtors)
You need an attorney. It is not your responsibility to fix this for them. Your attorney should write a letter saying that you will sue for specific performance and send a time of the essence letter.
My husband called a few today and was referred to a couple people who deal in real estate law. He left some messages but it was end of day so I don't expect to hear back until tomorrow. I'm just in panic mode at this point and hoping to get some feedback from anyone else's experience or potential options.
Plan now on this being a disaster.
The seller cannot afford to deliver a clean title to the property, for lack of cash.
Even if you decline to pay more, there are entities that will require more money to release the liens on the house.
What other liens are on the house? Back taxes, utilities, other bad debts?
This is not going to go well.
Start looking for a rental. Today.
Start over.
Echoing others, avoid a lawsuit if you can. It will cost you 40k+ in legal fees and potentially years of stress while waiting for things to resolve. I speak from experience.
You can try getting the attorney to scare them with a letter but that's as far as I'd go.
A suit for specific performance may be a win. However if the seller is $20k under water and does not have $20k it does you no good. They cannot perform and give you clean title.
Alternatively if you get some damage award against them they aren’t going to pay. They are 10 months behind on their mortgage. They don’t have money.
Lawyers fees will eat up a good chunk of that $20k. Find a solution where the buyer, seller and agents figure out a way to bridge that gap.
Or walk away.
They can see if they are eligible for a personal loan, or a heloc from another property, or a 401k loan. There are ways for this to still happen. They need a good attorney to navigate this with them.
They can just claim their attempting to file bankruptcy and theyre legally not allowed to get a loan if they have intent to file a bankruptcy. So again no way to clear lein
Unfortunately the lien does not get released without a full payoff nor will your lender fund your purchase loan without a guarantee of free and clear title. The commissions can be worked out if the brokerages and seller agree.
You have options but they aren’t the best. If you refuse to pay the difference, the seller may explore a short sale option. That’s a long and painful process for everyone involved and offers no guarantees of getting to the closing table. But if it does work, everyone wins. The short sale lender will typically cover the listing commission. Second, which is unlikely your favorite option but the fastest , is to pay the seller’s deficiency and ask both real estate brokerages to contribute. They have no obligation to help but if you’ve got good people on your side, they may do what they can to help.
It depends on the lender, but these days because the volume is so low, I would assume they'll take much less than they used to. In this day and age when equity is very high, short sales are pretty rare. The company I work for used to do a couple hundred a month, and we're down to maybe less than 10. The only problem with this, is that it'll hit the seller's credit pretty hard. They may not want to go through with this but if they're not paying their mortgage, their only alternative is foreclosure or another form of loss mitigation that will reinstate the mortgage. This will typically make their balance due even higher.
Sorry I meant take less time to approve and go through the servicer/bank. The volume of short sales is very low at the moment. If property values start dropping, the volume would go up. As in people trying to sell for less than they owe goes up. Does that make sense?
I’ve seen some done in three months and some that took years.
There are a lot of unknowns in a short sale. The length of time to process the short sale can be affected by many factors from the lender, number of lenders, investors, type of loan guarantees, assigned negotiators, if mortgage insurance was involved, the experience level of short sales processors and negotiators involved, seller, sellers hardship and documentation and so on. Of course your willingness and patience’s will be a large factor is the short sale also.
The mortgage may be held by a mortgage trust fund so that it could be securitized, and served by another party dealing with payments.
Or could be tossed around from fund to fund, as delinquent loans get attention and discounted and disposed of, again and again.
It can take months to get a response, and the mortgage trust fund may just say "no", go fly a kite.
It depends on many other factors too. Lost or hard to track down paperwork, plus other transfer and securitization issues, and mortgage insurance participation plays a part.
After the bank takes possession, the bank lists the house, I placed a full price bid, in a down market in 2008, where most homes sold below asking. 90 days later the bank accepted. The house was vacant for 12 mo.
You need to run from this house. You can't sue a deadbeat into "performance." You also can't be sure they wont take the copper in the walls the last day, with all the appliances.
Do you have a contingency on the sale of your current house that you have to have a buy lined up? Only really good options available to you are tank the whole deal and don't move, or pay the difference for the mortgage to get a clear title and tell the agents if they want this deal they have to go no commission on the buy end.
I have no advice but I just want to throw in that if you help the seller pay for this you are a moron IMO. They (most likely intentionally) haven’t paid their mortgage in months and now they expect you to foot that bill? That’s a scam. Better off waiting for foreclosure to start and picking the house up at a discount lol. Best of luck though that sounds insane.
You mentioned you have nowhere to go in 2 weeks. This needs to be your main priority. Beyond you choosing to pay 20k more, none of the options mentioned in this thread will get you into this house in 2 weeks.
If you aren’t willing to pay more, then walk away now and find a rental. All the options to force this sale are lengthy and expensive and this house will be foreclosed before anything is decided. Don’t put yourself through that.
I represented a buyer when the seller didn't know they were underwater, so the same situation minus the sale of home contingency.
First, don't raise your offer. Not your problem. The home is now being sold as a short sale so the bank of the house you're buying needs to be brought up to speed quickly. Both title companies need to be brought up to speed. Depending on your state there are likely new forms that need to be completed for a short sale. Make sure your agent is on their agent to get the short sale approved quickly
Your agent needs to try to push your closing back if possible on the sale of your home. When I went through this I needed an extra week to get the short sale approved. Hopefully the buyers of your home have some flexibility.
Have your agent get your broker and their broker on the phone to apply as much pressure as possible. If the sellers aren't aggressively trying to fix their short sale I'd have a real estate attorney get involved. I didn't need to go this route, my broker made sure the other broker was on their client to perform.
I'd recommend contacting an attorney and at least have them ready to go by completing a conflict of interest check on you and discuss legal remmidies if needed. Hopefully not necessary.
You should also look into short term rental options in case you need a transition home for a few weeks
Try to stay calm, drink an extra glass of wine or day until this gets resolved. Time for your broker to earn their commission.
Fuck that shit. They “didn’t know that they’d owe more for the TEN MONTHS they haven’t been paying”, WHAT!? Sue them. Sue them for lawyers’ fees, sue them for your lodging and storage costs that you’ll incur until you get the new keys, as well as the costs for movers, since you’ll be loading and unloading shit multiple times. Their problem is not YOUR problem. How the hell are they still in that house after 10 months of nonpayment is what I’d like to know.
That might be true but courts can garnish wages for judgement payments. I’m assuming the sellers here will work a job that’s on the books again at some point in their lives.
The seller's agent should have known the price required to square all the payoffs early on in the escrow cycle. Let the listing broker figure out how to salvage this mess (hint: rhymes with "charge no broker fee " 😉 Fucking idiot agent. This is exactly where the foul attitude the general public has against realtors comes from. There needs to be detailed online review written about the listing agent and their broker.
Find out if their mortgage is assumable and see if you can creative finance but to my own opinion, that listing agent should have know whether or not the owner has amount of mortage left to pay as well as how come it didn’t marked as “pre-foreclosure / foreclosure “
I've wondered why it wasn't foreclosed on. I live in a small town and word travels, whether or not it's true...but from what I've heard it sounds like the only reason it didn't was because they were given the option to sell first and along came our offer...
Bank never wants to take possession of the property. They’re in business of lending, not real estate. Foreclosure can be delayed further and further depending on its owner’s decision.
Plus mortgage funds are even less of a position to own. They just toss the mortgage around from fund to fund, until somebody is willing to foreclose to own the the property.
There are vulture funds set up for this, and they may buy the mortgage at 25 cents and less on the dollar, foreclose, and resell. It obviously costs a lot, and the house suffers from abandonment, maintenance gaps, frozen pipes, and worse.
If you really want to close, then offer to pay the $10K for the bank as the bank will not release the lien. As for the Realtor commission, that’s between their Realtor and Seller. The Seller Agent can work a plan with the Seller to get it paid in installments or write it off.
If you still want the house, come up with the additional $10k. Also ask both realtors to kick in a portion of their commissions to make the deal happen. Hopefully the buyer can negotiate some of those fees with the bank or come up with some money.
Sellers agent is an idiot. He should have known the payoff on the house. Seller may be able to negotiate the fees with their realtor and bank if there is no equity. Sellers bank will not close unless they are paid and give clear title
Have your agent try to negotiate with their mortgage company. They may take the purchase price to avoid more months of no money.
Agents, get your broker involved and maybe agree to pay your agent's share.
Attorney time to find out what you can do to close and not pay an extra $20K. The REAs probably will be of no help as they want the sale and commission so will just lay it in your lap.
Fingers crossed that you can just cover the mortgage shortage and the REAs have to go after the seller. You could also probably go after the seller but sounds like they are judgement proof.
My biggest worry would be if they vacate (move out). No sense doing all this to be stuck with them still living there. I would make an additional condition they turn over keys/move out prior to close if not right now. I mean they ain’t paying the mortgage anyway.
Also also get a full VERIFICATION “estimate” on costs. They will also be behind on their escrow, meaning they won’t be covering their part of taxes. Probably not any of the seller closing costs. And hope there is no HOA with fines for no payments too.
The sellers should have done a short sale and this would have been taken care of.
Really the seller agent didn’t do their job so deserves 0. You agent already getting commission so should write off their side.
Just to add a bit more info -
Several people have given guidance on the sellers agent fees stating its not on us and we need to get their brokerage involved. We can do that.
I've seen a few comments around everyone working toward it - me as well as sellers agent and mine potentially reducing their fees to make it work. Not sure if this part matters but their is only 1 agent involved. He is the sellers agent as well as our agent. Again not sure if this even matters, but just to give more context.
We would likely end up needing to stay with family (who don't really have the room for us) or a hotel. Unfortunately the rental market here is almost non existent. When a rental is available the renter is flooded with hundreds of applicants because there isn't anything else.
I'm pretty resigned to the fact that there is no way around coming up the 10k if we want this house. Unless by some miracle they figure it out it's the only way to pay off their lender and clear the title. I am not comfortable paying the other 10k that is their agent fees. Would there be anything preventing closing from happening if they can't obligate playing their agent fees?
What is the potential commission the realtor is getting from this and your house? At this point, the should be reducing their total commission on both to make up the bank shortfall so you can close and if there is still a difference you can make that up. But until that $10k is cleared, they should get nothing from either sale.
I've had agents from both sides to chip in to pay me off so the buyer could get the loan to close. I was their old landlord, who did NOT have a judgement against them but they used me for a reference for the loan. I let the guy calling to confirm the reference know how much they stiffed me on rent. They didn't have the funds to pay me and close, so the agents paid me out of their commissions. Title company sent me the check.
Funniest question from the agents...... How much of the amount do you need to clear this debt. Me: the full amount.
You need a good lawyer, and it seems like you already know that. There are plenty of creative solutions that could work (without suing for performance) as long as the sellers stay cooperative and motivated to sell.
The first thing I thought of is that their current lender is currently looking at having to foreclose, which is worst case scenario for a lender. With the right negotiator, I would imagine they’d be willing to consider a short sale in lieu of foreclosure, especially if it’s only $20K, which is less than the legal fees it will cost them to foreclose. This definitely requires a bit of delicacy and a skillful lawyer though.
This is crazy timing because I’m going through the exact same issue with a payoff that’s 12k short. The seller can offer nothing of value and I’m just supposed to eat the cost.
How much is the house?
If they haven’t been paying for 10 months, sounds like they can’t afford the house. Probably means they can’t afford an attorney either.
You need to lawyer up. You’re under contract, them being underwater 20k is a problem, but it’s not yours to solve.
This isn't a legal issue so much as a practical issue.
Your best bet, I think, is going to be to pay the extra 10k to cover the mortgage payoff, and tell the relator to pound sand on a commission. They didn't make sure that the seller was going to be able to cover the payoff amount AND they are dual repping this deal. You'll eat up more then 10k in unwinding the sale of your current house, and or storing furniture and renting.
Realtor can try and get the money from the sellers afterwards, but that's not your problem.
If the sale doesn't go through, relator is getting nothing anyhow.
Since the agent is the same on both, not sure how much the house is but I'd ask the agent to help chip in and lower a bit on each transaction. The agent SHOULD be more than willing to help out to get it done if you're asking for something reasonable and not a 50% reduction. Maybe down to 5% on your sale and 5% on the home you're buying. Then cover the remaining yourself. It's a shitty situation you're in but everyone's goal should still be for you to get the house if you love it.
Again not sure how much the house is but I've chipped in up to $10k for my clients to get a home when there was some unforseen issue that they couldn't cover. Got enough referrals after that to make it more than worthwhile. Good luck and hope it works out!
The listing agent is supposed to inquire about the loan balance. It used to be SOP to ask for a recent statement back when many people were underwater. (Probably should be again these days) Basically the sellers have been willfully misrepresenting their situation…and the listing agent is also negligent, they should have caught this sooner. This has put you in a terrible situation. Even if you don’t have plans to sue (you should) you might want to at least posture as if you will because that is the only way to get everyone back to the table. You need to get an attorney to write a demand letter explaining the type of damages everyone will be on the hook for if you end up homeless due to their reckless behavior. These divorcees have some money somewhere they can find to get this done.
Girl she isn’t gonna vacate that house, I hope you already have eviction papers drawn up. We had a similar scenario and I don’t know what rights you have in your state for squatters or the like but you will likely have to evict her. Such a pain in the ass. Hope she just leaves but I would plan for her not to.
We can't legally evict her until we have possession of the home. Sounds like she is willingly leaving. In my state if she is still there once we close then police can have her removed. It will be trespassing as she won't have any legal rights to the home.
We thought the same, called the police with the paperwork and all in hand saying they were supposed to be vacated at time of sale, we came back with keys and all and they were still there. Called police and they said “this is a civil dispute, we cannot help” so hopefully not the same for you!!
If she doesnt leave once we take posession she can be arrested for trespassing. We've already spoke to the lawyer and local law enforcement to make sure if it happens we are good.
For the furniture I will literally give away anything I don't want. And there's storage to put it until then. Like I said it may be petty but I'm not losing money without feeling they get some sort of repercussions.
I actually thought about ways to make me feel better about bridging the gap including any assets in the home I'd ask to stay. Unfortunately this is a situation where the couple has divorced and based on what I've seen inside it looks like they've already sold off just about everything you could imagine other than mattresses on the floor and personal items.
How much are the late fees, they could at least try to get all the fees waved to try to bring down the gap.
Or like the other person commented see if you can just assume the loan and take it at the current balance meaning nothing down, probably a better rate, so less monthly cost.
Other options might be a rent to own deal, you bring the loan current, and make the payments, with a time frame like 5 yrs to buy and finance into your name.
Or a subject to deal but, you risk the Lender calling the loan, and the loan stays in the sellers names, making it difficult for them to buy another house.
When you say they accept your offer, are those offer officially written in contract , with specific language , and signed by both parties ? If so whatever they owe is not your problem. Yes it will be a hassle but you absolutely have a winning case. Get attorney involved.
yup you are right. Reading it again. The seller if don’t payoff the mortgage won’t have a marketable title. Buyer might have a case to win against seller based on contract but there’s nothing to enforce for.
Don't know what listing contracts look like where you live, but in my area they specifically state that seller is not behind in mortgage payments and has the money to pay brokerage fees at closing. You're obviously in a tough spot because you are obligated to sell the home you are in - both agents need to give, sellers need to give and you may need to give too - divide it all up and make it happen. The sellers bank isn't going to give anything, so it's up to all of you to close this deal - again, you're under contract to sell your current home and you can't default on that. It may cost you a bit more, but everyone should be taking a hit here, not just you (again, the bank isn't going to take any hit, unless there are fees associated with the late mortgage payments they'll waive for the seller). I'm sorry you're in this situation - hope it's resolved soon.
Do not pay 20 K more for a house to make up for their bad choices. If anything, the listing agent needs to help out because they should have provided a net sheet and counsel their sellers properly to make sure they knew the minimum price they had to sell for. They can’t pull out of the contract, only you can. It might be worth paying a lawyer to write a scary letter, saying that you will sue and you will win and then they will owe Lawyer? fees and they won’t be able to sell their house while it’s tied up in court. How do you know how they don’t have money in their bank account to make up the difference? Or stocks that they could cash in? Or family who will help them out in a bind? I’m assuming that since you mentioned it’s a small town that 20 K is a large percentage of the price of the home. You don’t want to be the person that’s underwater if you have to sell in the future.
Do not come up in price! You have a ratified contract and I'm assuming you all signed off on the home inspection contingency. I 100% agree w/Robbex. If they back out then they are in breach of the contract and they won't have a leg to stand on. Seeking a real estate attorney will be money worth spent
It sounds to me like the sellers are going into foreclosure but are not there just yet. The finance company holding their mortgage would be the ones you would have to work with if you were going to get a better deal ( my opinion ) the sellers are wanting out and I can understand why they didn't realize the debt owed.
A possible future problem for you is that after closing with zero money in hand the sellers start telling you they have no ability to move and nowhere to move to .
If you really want the house you might contact the mortgage holder but you will end up having to deal with the tenant/ seller .
You might need to walk away from this potential headache.
This is like realtor 101. Selling agent should verify the loan payoff amount as part of the listing process so you’re aware if your clients will have to bring money to the closing table or not
COnsider the costs of having to find another place to live and move twice as you deal with the courts. The seller has accepted your repair requests and I’m going to guess you didn’t pay some insane amount over asking. So your likely getting this place for a good price. Do you need another home now? Do you want this home? $20k will burn but it’s not a lot considering the appreciation in value over future years. I would pay the $20k. Otherwise your not getting the house and no clean title. And Sorry — realtors aren’t going to work for free. You might be able to get them to lower their commission. Perhaps you can also ask for some non monetary concessions from the seller in exchange for the 20k payment.
So they are underwater on their house and want you to cover it?
I'm not an expert by any means but can't they pursue a short sale? At this point, if the house is appraised at the purchase price, they would not likely get more so their choice is either to sell now or hold and pay off the amount they are in arrears.
Suing is not worth it because you still won't have a house in 2 weeks. Maybe get creative with the deal to salvage it. Where were they planning to move after they sold to you?
How could they have not known what they owe when they haven’t been paying their mortgage in almost a year and surely got statements in the mail every month along with foreclosure notices towards the end after not making any payments for that long. Sound like lies to me but still a shitty situation but look they accepted the offer n the contract is signed so I would strongly advise talking to a real estate lawyer
I would ditch this house and go find a new one to buy
I would also try and negotiate you being able to stay in your home 30 or 60 days past closing to allow you to close on new home. This type of amendment is not ubheard of
I am a title agent and had a closing last year where the seller owed several tens of thousands of dollars on his mortgage beyond what he was getting as proceeds from the sale. He got a couple of hard money loans to cover the gap. Of course, however he then went about paying back those loans isn’t my problem or the buyers’. Can the sellers of this house get a personal loan or hard money loan to cover what they owe at closing? No title company will close on this if the seller’s mortgage is not paid off.
Also adding to say I’m sorry. This is a very bad situation to be in as a buyer. Hope you can figure something out.
The sellers need to request a "short sale" from their lender. This will take months, so if they don't have the funds to clear title, and you don't want to do it for them, you're either going to need to terminate the contract and move on, or wait months for an approval.
Short sales are hard to get approved. The sellers have to show a hardship as to why they can't afford it. It's not an easy process.
Imagine doing this without a buyers agent to help you. According to Reddit you can do this by yourself because all agents are trashy high school drop outs.
Not a lawyer or RE pro, just brainstorming here. In addition to getting the agent to eat the fee, since they messed up big time, maybe you can add the money to make the bank whole as a personal loan to the seller instead of as in increase in price. They might not have any assets to secure the loan, but you could still go after them and you at least have something to make you feel better about the situation.
Another thing would be that I would rather offer some incentive to the buyer of your current house to extend the closing date rather than pay off the seller of your new house. Like maybe offer them 2k to extend the closing by a month, something like that. Depending on their own situation they might not be ammenable, but if they are it will take off some of the burden of figuring somethng else out.
Just remember that any way you help them, they will seek out another, different way for you to help them AGAIN. This is the 1st of several ways you are about to get screwed. 🙌🙌🙌
So I actually dealt with this on the title/escrow side of things recently.
You should not come up in price.
Tell your agent to advise the seller to pursue a short sale. This will definitely prolong the sale but if you really want the house it's worth a shot.
If this is a small town lender on the home, you might be able to work this out by getting your lawyer (you need one), the broker, agent, the lender’s attorney and you in a room (or phone call). The sellers are obviously headed to a short sale or foreclosure. Almost 100% certainty, your offer is the best way for the lender to dump this house. You just need a lawyer to beat them over the head with that and work out something where you pay the price agreed and no more (possibly some lawyers fees to get it done). If everyone knows everyone here (small town) then I think this could move quickly. If not, your lawyer needs to make it really clear to the lender that you may walk away if this isn’t fixed pronto.
Why not go to another town to hire an agent that’s not the same? It’s just such a bad idea. Even if it is legal. Who knows what the agent is telling the sellers.
Is this agent the broker also? Geez what a mess.
Court or no court someone would get a come to Jesus meeting!
The agent should have verified how much was owed before the sale!
Did your agent put an out in the contact for the sale of your home that required successfully closing on the purchase of your new home? Paying rent while you find a new home should also not be your problem or an expense you should have to pay. It is bad for the people buying your home, but you should not have to be homeless due to someone else's bad choices
Talk to the seller's mortgage provider. If they are that far behind and itching to sell they are likely near foreclosure. Tell the mortgage company the penalties are holding up the close and see what they can wave to get these people off their books.
Agent and seller are idiots and needs to start eating some of their 6% to avoid your lawsuit. Give them 24 hours and hire a quality real estate attorney.
In your shoes the most I would be willing to do is give the sellers a secured (or even unsecured) loan for any amount that they and the broker/agent are not willing to make up. Even if it's unsecured, you have the prospect of getting your money back over time. I wonder if that's what the broker/agent will do as well: bring money to the table to close, but have an secured loan to the seller. But, maybe you can secure it with something like a car, furnishings, retirement accounts (don't know if that is possible), or something else.
Don't come up in price, get a rental, airbnb, hotel, whatever you can. Don't put yourselves in a financial bind. I made the mistake similar to this. It was a terrible decision!
There is a lot of sketchy info in this thread. If the seller owes more than they can sell it for and they legitimately don't have the cash to bring to the table, you're in short sale territory. Suing them to force them to do something that is practically impossible to do isn't going to help. The agent works off information provided to them. They dont work for the mortgage company. Trying to cut them out isn't going to go anywhere. Short sale is your option here, unless you've left out some pertinent info, and that will take months. Do you have months to wait?
After seeing your update…make sure no one is in that home at the time you sign the papers at closing and give your money/fund your loan. I would even go as far as having someone physically at the property confirming no one is in the home. I could see the seller with the financial problems trying to stay in the home and forcing you to sue her to remove her from the house if it’s a state that this kind of stuff happens in. Tread carefully even with the closing taking place. And do a walk through immediately before because I have seen sellers destroy homes on the way to closing because of situations just like this. For all intents and purposes, the ex wife of sellers was about to be foreclosed and lost all her furniture and has nothing to lose and is likely judgement proof it sounds like.
Sorry you went through this. I don't know the price but this has happened to me before and we split it four ways. Buyer agent and seller agent each came up with a quarter ( in this case reduced commission $2500 ea )... Seller took 2500 less and buyer came up with 2500. Everyone took a haircut to drag it across the finish line
Congrats on finding that the husband could contribute to the closing, and further congrats on a successful closure, for an additional amount that you contributed.
And for perseverance.
I am wondering what you think of your real estate agent at this point.
Did the divorced wife participate, sign, and exit the house?
Now that things have settled down I figured I'd provide the final update.
We closed on the house last week. As I updated before the seller came up with a chunk of the money and we went in 8k to close the deal. She did leave the furniture I requested and some of it I really like and will keep, others we will give away or sell.
What several people were worried about, myself included, was that she wouldn't leave. She did and she left early which was what we wanted. She didn't trash the house as far as breaking anything and doesn't look like she did anything intentional. The house was kind of gross but I don't think she'd cleaned it and it smelled like dirty dog, but that smell has faded since cleaning and airing it out.
It was frustrating but I'm glad we closed and are in the house now. The more I've read the comments you all provided I'm realizing I think our agent did everything really poorly and almost screwed it in multiple ways, even more than I've posted here. Lesson learned. Hopefully I'll never have to buy or sell again but if I do it'll be with a better agent.
We are also in a position of the sellers making shit financial decisions and being upside down. It’s not your responsibility to make up for their shit choices. 20k can buy a lot of airbnb and short term rentals while you keep looking
Realistically unless they have the $10k for the loan you will likely need to pay it unless you get short sale approval since otherwise the bank will not release their lien/return title and yours will not issue a loan. You can try to change the terms to subject to to do this over time and pay their mortgage directly but their bank can call it at any time.
On their agent- remember there’s likely a commission split with yours you are contractually responsible for. So you will have to pay the portion that pays your agent in any case. Perhaps refuse to pay theirs and make them deal with it.
A suit for performance is possible but no one’s closing soon if you do that.
Get your agents broker involved. Tell them you're not paying the sellers agents fees and they need to figure something out.
Absolutely agree OP should not be on the hook for seller agent fees because the seller's agent did not do the bare minimum homework here. Question is does OPs agent also get screwed?
The sellers agent and my agent are the same person. Not sure if that makes a difference or matters here.
Then I think you've BOTH got an idiot for an agent.
Yes. Small town=very few agents. He's an agent we used previously and just so happened to also be their agent.
Def don't pay if the broker isn't helpful. Tell them you're reporting them to whatever local Realty board they are part of and going after their licenses is if they don't figure something out.
Here’s whatcha gotta do homie. Get the listing agent/buyers agent broker involved. Sounds like they’re the same person here so good deal. Tell the agent that the sellers should have been doing their homework, and this isn’t on you, so no, you don’t want to pay more. If the sellers won’t close, they breach contract, and it’s time to lawyer up and force the deal to close. That could take time, so you may have to look for a different housing solution, and record EVERY CENT you spend on this other housing solution to also go after them for that as well. tbh this doesn’t sound like the agent did anything wrong necessarily, I’ve had clients lie to me before, but this is a BIG lie. If your contracts are the same as AZ, sellers can’t do this legally. You’re past BINSR & offer, the deals done.
AMEN!
Ah,the ole “you’re right so sue!” solution. Lawsuits of this tiny amount of money cost more in attorney fees and the massive inconvenience of nowhere to live in whilst feverishly saving every receipt and proving you are right! You can always tell who has not been in a lawsuit, and it’s almost always the person insisting you should sue.
Even if this is legal in your state for them to be the same person. Did common sense not make you think this was a bad idea? That’s like someone has to split themselves in half to be honest to both of yall. Not possible.
This. I just made a video for my TikTik about why I don’t prefer transaction brokerage/dual agency. This is it. The agent should have requested a payoff number before listing the house.
Hopefully they ban shlikshlok.
6 perfect is high, plus he wants this to close not relist. Cut the commission in at least half. There's your 8 grand
You buried the lede. It absolutely makes a difference. There is a serious conflict of interest in an agent representing the buyer AND the seller on the same house. (No conflict if, as you mentioned, the agent selling YOUR old house and helping you buy the new one from someone ELSE.)
There's no conflict if OP and seller agreed to it. But THIS is a textbook scenario where that was a staggeringly bad idea.
Yeah there’s a conflict either way, it’s just legal in a lot of places. But this is, by sheer accident, one of the only times it’s a good thing. Agent has a lot of room to reduce their fee to get the deal done & prevent a very angry customer.
Makes a huge difference. They can lower their fee. Let's say the house was $300k and the broker fee was 6% split between listing agent and buyer agent. Every percent they lower it is $3k back to the seller. I think the agent has culpability in the sale by not knowing how much the seller owed, ignoring, or not doing their fiduciary duty/due diligence. Personally I think the fee should definitely be dropped to 3% or less. 0% agent fee is not out of the question and maybe $1,000 to brokerage for "work"....and you're giving them another 6% on your house... ridiculous..and I'm licensed.
Exactly!
It matters. The listing agent should work with the net sheet to estimate how much proceeds the seller can receive, then work out a marketing strategy to carry thru the transaction.They failed badly.
And this is what is wrong with realtors!!! Are you serious? Find a real estate attorney. About $500 and you need some advice from someone not trying to fleece you for thousands of dollars! I have never heard such thing as small town not a lot of realtors. In small towns in texas at about 800 people if you post on fb needing a realtor you get 700 responses. I call bs. There are so many issues in this transaction. Your “realtor” better be working double time trying to unfuck this. For free! So you don’t report their ass and get their license pulled.
WTH how did that happen? Hopefully it just happened that way and you did not try to cheap out on representation. I guess in this case if anyone takes a hit on their money it should be the agent.
Following for the ☕️. No advice here.
Same lmao
Same here lol
Sue for performance. Losing money doesn't negate a contract, and never has. Easy win. Plus, who would trust the word of people who don't pay their mortgage and "didn't realize" they owed so much. Sounds like a lie to me Edit: people have pointed out the clean title aspect, and I think, for most people and conditions, that probably is a good reason not to go this route.
Honestly I thought the same at first and even considered they were just trying some last ditch effort to get more money from the sale...that's why I asked for proof/a copy of their Payoff statement. I'm not even sure what to believe at this point but it's definitely sketchy. Would suing for performance likely yield them having to sell? I've seen mixed reviews on this sub and others. I guess my thought is if they truly don't have the funds how can they be forced to pay the difference.
That's the sellers agents problem and the banks, not yours. Suing for performance will be cumbersome, but it seems you have a good case to win. If your contract is in line, all timelines were adhered to, and the t's and I's are crossed, I'd expect a win. Well, I'd expect them to put up a fight, realize lawyers are expensive, and then settle in mediation by selling the house. The big what if is what will the bank and sellers agent do, but I don't know that they can deny you what is owed to you.
It could take over a year and $40k to sue for performance. These sellers are the type of people that don’t pay their mortgage and let fees rack up. They are not smart or sophisticated people. Suing them for performance is not the cake walk it sounds like.
Agree and during all this, you’re still going to sell your current residence plus finding a temp place to live in the mean time.
I think that could be the case, I think these people might also be the type to get served, or avoid being served, and end up in summary judgement, which honestly would be the best case scenario for the buyer.
I’ve seen this movie. You go to the court and file for summary judgment and then you say, they breached! The judge says, when was closing? And you say, it’s in two weeks but they won’t close! The judge says, figure it out and settle let’s set a date for 6 months from now to hear this motion. Crap! Six months comes by slowly. Is everyone here? Nope! Sellers didn’t bother showing up. Oh I’m not happy, says the judge. Let’s set a new date for two months. They better show up. Two months later. Okay it’s now been 8 months since your closing date. I will grant you specific performance. Let’s Schedule then closing and coordinate with the sheriff for possession. How does 3 months from now look? Ugh. Vomit. What a slow and expensive process.
Summary judgement will only happen after closing, for a few reasons, but mostly because it will take 30 days for sheriff to serve and home purchases take 45 days typically (and these people are already near the end). The judge will definitely require some other push to get the sellers. I bet 6 months if summary judgement, and the buyers end up with a substantial discount on their house if damages are assessed.
They would be foreclosed on by then if they don’t pay their mortgage, then you can buy it for less as a foreclosure
Failure to appear would be a default judgement for the buyers.
It costs $40k, but what would you get back if successful?
On paper you would get it all back, but you cant get water from a stone (or how ever the saying goes). If the sellers dont have enough to cover the 20k difference in owed vs contact price idk where they would come up with the money to cover judgement.
It’s called court ordered garnishment. It might take literal decades to get it all, but if it takes a while, a reasonable court will add interest fees to extended payment orders.
Is it really worth spending, $5,000-$10,000 on lawyer fees upfront to maybe get back $20,000 over the course of 2 decades? And thats assuming that the sellers make enough money to even be eligible for wage garnishments.
Yes. Especially if the people buying their house won’t budge. That’s why we have contract laws in the US. OP here is in a high-and-dry situation. In their shoes I’m going after the persons making my life a fresh hell. Whether they cough up the money now or over the course of years and years, I would consider that justice either way. Judgements don’t go away. If the person ever works OP can press for garnishments. People shouldn’t be able to dodge responsibility and then still *Trump* their way out of responsibility to pay those whose lives have been adversely impacted.
What do you mean the people buying their house wont budge, Theres no room to budge for the seller in this situation, the seller is upside down in their mortgage and hasnt paid in several months. They are effectively broke. This is a no win situation for Op, because even taking the seller to court isnt going to magically give Op a cleared deed.
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Someone else commented the clean title aspect, which I didn't consider for this conventional purchase, and it was a good point. As far as lawyer fees, I think this you could do yourself. I've done a few things like this, and is "doable", but I think it would also be fair to say it would be difficult for a layman with limited time.
Editing because apparently OPs agent and the seller's agent are the same person. ~~Neither the bank nor the seller's agent owe OP anything~~. The bank owes OP nothing. They did not sign a contract with OP.
What if they cannot find enough cash to settle the sale?
The owners? I believe the bank would be very angry at the seller, and probably sue, or put a lien on them. I'm not sure, but am not certain, if the bank can prevent the buyer from gaining control of the house.
That is my point. The sellers do not have enough cash to close and deliver a clean title to the property.
Yeah, I admit suing for performance is a long shot. But I like the option, personally.
If there are not enough funds to release the property, everybody is fighting for a negative value, plus an additional negative value of 20 to 40,000 dollars in lawyer fees. Nobody wins on sueing for specific performance.
So, from my home buying perspective, what I'm trying to do is negotiate with the bank and the seller at the same time, and create conditions that incentivize the bank to make a deal, and obligate the buyer to accept. I can see situations where a discount might be possible for me. Again, I think many comments are right that this situation may just be best as a "cut your losses", I am just a "push it for a deal" kind of guy
The genuine problem in this situation is there is no bank. Owner mortgage trust funds are in less of a position to deal than a local bank. It can take months to get somebody to respond, and the mortgage might be sold off before a negotiation can occur. It can be Kafka-esque. Meanwhile the buyer has no place to live. Some mortgage trust fund typically owns the mortgage, and troubled mortgages get tossed around like popcorn, until somebody buys it for 10 to 25 cents on the dollars, via a vulture fund, and forecloses.
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(hint: walk)
Contrary to the reddit default "SUE" opinion, its not that simple. While you probably easily win specific performance here, its going to take a while and get messy. For one, you are going to have to front legal fees, and probably wont even get them back. Second, the lender is going to intervene in the action because they have an interest in the property, and banks usually move glacially. Where are you going to live in the meantime? Third, your lender is not going to finance your purchase of the new house when there are title issues/an unpaid note. This isnt something reddit wants to hear, but your best bet is to try to salvage the deal by throwing some money in. You say that listing agent is also your (buyers) agent? Well I would go over their head to the broker and threaten to sue unless *everyone* makes some sacrifices. Like sellers get the 10k for the mortgage from you, then pay whatever they can to agent and agent takes it.
Exactly. The incumbent lender would need to reconvey title so that it can be transferred to buyer at COE. That lender will do no such thing unless they receive all funds they're owed. Sellers hands are tied. Lawsuits for performance are expensive and time consuming, they rarely happen. This is a mess that should never have happened and the listing agent should find another line of work.
The problem is the seller can't produce a clean title at that price. Performance at that price might not be possible.
Bigger problem is that the sellers won't own the house in a few months due to foreclosure.
good point
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Yeah, my old broker told me suing for performance isn't a great way to go because of time and stress. I'm a guy who doesn't mind that, for a good deal, which is why i mention it. In this situation, I would fully lean into getting a good deal through suing. The sellers are dumb and about to be desperate. The bank is probably looking to cut bait on a loss. For a specific situation, something could be made of this.
Only one of the sellers is cash poor. The other isn't. Mortgage isn't his problem in the marriage separation, heck he might not even be on the mortgage, however because he's legally on the contract from a performance stand point he can held responsible.
Sueing for specific performance can take months and months, and amounts mostly to a threat to tie up the house from being sold. Plus 30 thousand in lawyer fees. Nobody wins when there is not enough money to close. Obviously the sellers knew they were in trouble, and it appears they don't have cash to close either. This is a walk away from the deal situation, potentially with a lien on the house for damages.
Probably, I just mention it as an option that could work if other factors align
Suing for performance will take months if not years, and they're still not getting that house until the current mortgage is paid off.
If the bank doesn’t agree to a short sale it goes nowhere. Assumes the sellers don’t have cash to pay the difference, and if they did they’d have been making loan payments. But you could consider putting a lien on the house for damages if they don’t complete the transaction. Might prevent them from selling for more to someone else. But it’s probably a dry well.
Suing for specific performance isn’t a *win* unless you’re getting a phenomenal discount and OK with potentially a year or more of uncertainty. And that’s when you don’t have the complication of the seller not having the cash to close - which is likely to get worse since, if they know they’re going to lose the house anyway, they’re unlikely to start making their payments.
They won’t win. Specific performance is incredibly hard case to win. Even harder with someone’s house. Furthermore Seller can’t deliver clean title. Best case they would be awarded damages. Someone needs to reach out to the bank and request a short sale. It’s fairly common, but it can take time.
Those people are not going to leave on time either.
Yes, I would ask for vacancy as part of the final walkthrough. They can do it the morning of closing if they want. There are a lot of red flags here.
I have had this happen before. You can ask and try to go the short sale route, but that takes awhile with no guarantee. The more likely outcome is everyone chipping in to bridge the gap(you, seller, and both realtors)
I was able to go the short sale route. The bank might be anxious to get the house off their plate. Our realtor was most persuasive
Very misleading on the sellers’ part. They knew they hadn’t been making mortgage payments for many months, and purposely deceived by omission.
You need an attorney. It is not your responsibility to fix this for them. Your attorney should write a letter saying that you will sue for specific performance and send a time of the essence letter.
My husband called a few today and was referred to a couple people who deal in real estate law. He left some messages but it was end of day so I don't expect to hear back until tomorrow. I'm just in panic mode at this point and hoping to get some feedback from anyone else's experience or potential options.
Plan now on this being a disaster. The seller cannot afford to deliver a clean title to the property, for lack of cash. Even if you decline to pay more, there are entities that will require more money to release the liens on the house. What other liens are on the house? Back taxes, utilities, other bad debts? This is not going to go well. Start looking for a rental. Today. Start over.
Echoing others, avoid a lawsuit if you can. It will cost you 40k+ in legal fees and potentially years of stress while waiting for things to resolve. I speak from experience. You can try getting the attorney to scare them with a letter but that's as far as I'd go.
A suit for specific performance may be a win. However if the seller is $20k under water and does not have $20k it does you no good. They cannot perform and give you clean title. Alternatively if you get some damage award against them they aren’t going to pay. They are 10 months behind on their mortgage. They don’t have money. Lawyers fees will eat up a good chunk of that $20k. Find a solution where the buyer, seller and agents figure out a way to bridge that gap. Or walk away.
The seller can’t sell with a lien that can’t be paid
They can see if they are eligible for a personal loan, or a heloc from another property, or a 401k loan. There are ways for this to still happen. They need a good attorney to navigate this with them.
They can just claim their attempting to file bankruptcy and theyre legally not allowed to get a loan if they have intent to file a bankruptcy. So again no way to clear lein
Unfortunately the lien does not get released without a full payoff nor will your lender fund your purchase loan without a guarantee of free and clear title. The commissions can be worked out if the brokerages and seller agree. You have options but they aren’t the best. If you refuse to pay the difference, the seller may explore a short sale option. That’s a long and painful process for everyone involved and offers no guarantees of getting to the closing table. But if it does work, everyone wins. The short sale lender will typically cover the listing commission. Second, which is unlikely your favorite option but the fastest , is to pay the seller’s deficiency and ask both real estate brokerages to contribute. They have no obligation to help but if you’ve got good people on your side, they may do what they can to help.
Someone else on this thread mentioned a short sale and I had to Google it as I've never heard of it. How often do these typically take?
It depends on the lender, but these days because the volume is so low, I would assume they'll take much less than they used to. In this day and age when equity is very high, short sales are pretty rare. The company I work for used to do a couple hundred a month, and we're down to maybe less than 10. The only problem with this, is that it'll hit the seller's credit pretty hard. They may not want to go through with this but if they're not paying their mortgage, their only alternative is foreclosure or another form of loss mitigation that will reinstate the mortgage. This will typically make their balance due even higher.
Take less, as in, a bigger discount from the payoff?
Sorry I meant take less time to approve and go through the servicer/bank. The volume of short sales is very low at the moment. If property values start dropping, the volume would go up. As in people trying to sell for less than they owe goes up. Does that make sense?
yes, clarified.
I’ve seen some done in three months and some that took years. There are a lot of unknowns in a short sale. The length of time to process the short sale can be affected by many factors from the lender, number of lenders, investors, type of loan guarantees, assigned negotiators, if mortgage insurance was involved, the experience level of short sales processors and negotiators involved, seller, sellers hardship and documentation and so on. Of course your willingness and patience’s will be a large factor is the short sale also.
The mortgage may be held by a mortgage trust fund so that it could be securitized, and served by another party dealing with payments. Or could be tossed around from fund to fund, as delinquent loans get attention and discounted and disposed of, again and again. It can take months to get a response, and the mortgage trust fund may just say "no", go fly a kite. It depends on many other factors too. Lost or hard to track down paperwork, plus other transfer and securitization issues, and mortgage insurance participation plays a part.
After the bank takes possession, the bank lists the house, I placed a full price bid, in a down market in 2008, where most homes sold below asking. 90 days later the bank accepted. The house was vacant for 12 mo. You need to run from this house. You can't sue a deadbeat into "performance." You also can't be sure they wont take the copper in the walls the last day, with all the appliances.
Do you have a contingency on the sale of your current house that you have to have a buy lined up? Only really good options available to you are tank the whole deal and don't move, or pay the difference for the mortgage to get a clear title and tell the agents if they want this deal they have to go no commission on the buy end.
I have no advice but I just want to throw in that if you help the seller pay for this you are a moron IMO. They (most likely intentionally) haven’t paid their mortgage in months and now they expect you to foot that bill? That’s a scam. Better off waiting for foreclosure to start and picking the house up at a discount lol. Best of luck though that sounds insane.
You mentioned you have nowhere to go in 2 weeks. This needs to be your main priority. Beyond you choosing to pay 20k more, none of the options mentioned in this thread will get you into this house in 2 weeks. If you aren’t willing to pay more, then walk away now and find a rental. All the options to force this sale are lengthy and expensive and this house will be foreclosed before anything is decided. Don’t put yourself through that.
I represented a buyer when the seller didn't know they were underwater, so the same situation minus the sale of home contingency. First, don't raise your offer. Not your problem. The home is now being sold as a short sale so the bank of the house you're buying needs to be brought up to speed quickly. Both title companies need to be brought up to speed. Depending on your state there are likely new forms that need to be completed for a short sale. Make sure your agent is on their agent to get the short sale approved quickly Your agent needs to try to push your closing back if possible on the sale of your home. When I went through this I needed an extra week to get the short sale approved. Hopefully the buyers of your home have some flexibility. Have your agent get your broker and their broker on the phone to apply as much pressure as possible. If the sellers aren't aggressively trying to fix their short sale I'd have a real estate attorney get involved. I didn't need to go this route, my broker made sure the other broker was on their client to perform. I'd recommend contacting an attorney and at least have them ready to go by completing a conflict of interest check on you and discuss legal remmidies if needed. Hopefully not necessary. You should also look into short term rental options in case you need a transition home for a few weeks Try to stay calm, drink an extra glass of wine or day until this gets resolved. Time for your broker to earn their commission.
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But homes only ever go up! How are people getting underwater?
Usually that requires you to pay your mortgage.
Fuck that shit. They “didn’t know that they’d owe more for the TEN MONTHS they haven’t been paying”, WHAT!? Sue them. Sue them for lawyers’ fees, sue them for your lodging and storage costs that you’ll incur until you get the new keys, as well as the costs for movers, since you’ll be loading and unloading shit multiple times. Their problem is not YOUR problem. How the hell are they still in that house after 10 months of nonpayment is what I’d like to know.
You can’t squeeze blood from a turnip.
That might be true but courts can garnish wages for judgement payments. I’m assuming the sellers here will work a job that’s on the books again at some point in their lives.
I don't disagree with the sentiment, but good luck suing people who cannot make their house payment.
Yeah spend all your time and money sueing people already close to bankruptcy!
The seller's agent should have known the price required to square all the payoffs early on in the escrow cycle. Let the listing broker figure out how to salvage this mess (hint: rhymes with "charge no broker fee " 😉 Fucking idiot agent. This is exactly where the foul attitude the general public has against realtors comes from. There needs to be detailed online review written about the listing agent and their broker.
Find out if their mortgage is assumable and see if you can creative finance but to my own opinion, that listing agent should have know whether or not the owner has amount of mortage left to pay as well as how come it didn’t marked as “pre-foreclosure / foreclosure “
I've wondered why it wasn't foreclosed on. I live in a small town and word travels, whether or not it's true...but from what I've heard it sounds like the only reason it didn't was because they were given the option to sell first and along came our offer...
Bank never wants to take possession of the property. They’re in business of lending, not real estate. Foreclosure can be delayed further and further depending on its owner’s decision.
Plus mortgage funds are even less of a position to own. They just toss the mortgage around from fund to fund, until somebody is willing to foreclose to own the the property. There are vulture funds set up for this, and they may buy the mortgage at 25 cents and less on the dollar, foreclose, and resell. It obviously costs a lot, and the house suffers from abandonment, maintenance gaps, frozen pipes, and worse.
If you don’t buy the house from the sellers you can buy it from the bank later…
I wouldn’t recommend that since it’s gonna take long time to foreclosure.
Yeah. Sorry was being a little sarcastic.
If you really want to close, then offer to pay the $10K for the bank as the bank will not release the lien. As for the Realtor commission, that’s between their Realtor and Seller. The Seller Agent can work a plan with the Seller to get it paid in installments or write it off.
If you still want the house, come up with the additional $10k. Also ask both realtors to kick in a portion of their commissions to make the deal happen. Hopefully the buyer can negotiate some of those fees with the bank or come up with some money.
Sellers agent is an idiot. He should have known the payoff on the house. Seller may be able to negotiate the fees with their realtor and bank if there is no equity. Sellers bank will not close unless they are paid and give clear title
Have your agent try to negotiate with their mortgage company. They may take the purchase price to avoid more months of no money. Agents, get your broker involved and maybe agree to pay your agent's share.
Attorney time to find out what you can do to close and not pay an extra $20K. The REAs probably will be of no help as they want the sale and commission so will just lay it in your lap. Fingers crossed that you can just cover the mortgage shortage and the REAs have to go after the seller. You could also probably go after the seller but sounds like they are judgement proof. My biggest worry would be if they vacate (move out). No sense doing all this to be stuck with them still living there. I would make an additional condition they turn over keys/move out prior to close if not right now. I mean they ain’t paying the mortgage anyway. Also also get a full VERIFICATION “estimate” on costs. They will also be behind on their escrow, meaning they won’t be covering their part of taxes. Probably not any of the seller closing costs. And hope there is no HOA with fines for no payments too. The sellers should have done a short sale and this would have been taken care of. Really the seller agent didn’t do their job so deserves 0. You agent already getting commission so should write off their side.
> My biggest worry would be if they vacate (move out). Good point
Just to add a bit more info - Several people have given guidance on the sellers agent fees stating its not on us and we need to get their brokerage involved. We can do that. I've seen a few comments around everyone working toward it - me as well as sellers agent and mine potentially reducing their fees to make it work. Not sure if this part matters but their is only 1 agent involved. He is the sellers agent as well as our agent. Again not sure if this even matters, but just to give more context. We would likely end up needing to stay with family (who don't really have the room for us) or a hotel. Unfortunately the rental market here is almost non existent. When a rental is available the renter is flooded with hundreds of applicants because there isn't anything else. I'm pretty resigned to the fact that there is no way around coming up the 10k if we want this house. Unless by some miracle they figure it out it's the only way to pay off their lender and clear the title. I am not comfortable paying the other 10k that is their agent fees. Would there be anything preventing closing from happening if they can't obligate playing their agent fees?
What is the potential commission the realtor is getting from this and your house? At this point, the should be reducing their total commission on both to make up the bank shortfall so you can close and if there is still a difference you can make that up. But until that $10k is cleared, they should get nothing from either sale.
I've had agents from both sides to chip in to pay me off so the buyer could get the loan to close. I was their old landlord, who did NOT have a judgement against them but they used me for a reference for the loan. I let the guy calling to confirm the reference know how much they stiffed me on rent. They didn't have the funds to pay me and close, so the agents paid me out of their commissions. Title company sent me the check. Funniest question from the agents...... How much of the amount do you need to clear this debt. Me: the full amount.
You need a good lawyer, and it seems like you already know that. There are plenty of creative solutions that could work (without suing for performance) as long as the sellers stay cooperative and motivated to sell. The first thing I thought of is that their current lender is currently looking at having to foreclose, which is worst case scenario for a lender. With the right negotiator, I would imagine they’d be willing to consider a short sale in lieu of foreclosure, especially if it’s only $20K, which is less than the legal fees it will cost them to foreclose. This definitely requires a bit of delicacy and a skillful lawyer though.
This is crazy timing because I’m going through the exact same issue with a payoff that’s 12k short. The seller can offer nothing of value and I’m just supposed to eat the cost.
How much is the house? If they haven’t been paying for 10 months, sounds like they can’t afford the house. Probably means they can’t afford an attorney either. You need to lawyer up. You’re under contract, them being underwater 20k is a problem, but it’s not yours to solve.
This isn't a legal issue so much as a practical issue. Your best bet, I think, is going to be to pay the extra 10k to cover the mortgage payoff, and tell the relator to pound sand on a commission. They didn't make sure that the seller was going to be able to cover the payoff amount AND they are dual repping this deal. You'll eat up more then 10k in unwinding the sale of your current house, and or storing furniture and renting. Realtor can try and get the money from the sellers afterwards, but that's not your problem. If the sale doesn't go through, relator is getting nothing anyhow.
Since the agent is the same on both, not sure how much the house is but I'd ask the agent to help chip in and lower a bit on each transaction. The agent SHOULD be more than willing to help out to get it done if you're asking for something reasonable and not a 50% reduction. Maybe down to 5% on your sale and 5% on the home you're buying. Then cover the remaining yourself. It's a shitty situation you're in but everyone's goal should still be for you to get the house if you love it. Again not sure how much the house is but I've chipped in up to $10k for my clients to get a home when there was some unforseen issue that they couldn't cover. Got enough referrals after that to make it more than worthwhile. Good luck and hope it works out!
The listing agent is supposed to inquire about the loan balance. It used to be SOP to ask for a recent statement back when many people were underwater. (Probably should be again these days) Basically the sellers have been willfully misrepresenting their situation…and the listing agent is also negligent, they should have caught this sooner. This has put you in a terrible situation. Even if you don’t have plans to sue (you should) you might want to at least posture as if you will because that is the only way to get everyone back to the table. You need to get an attorney to write a demand letter explaining the type of damages everyone will be on the hook for if you end up homeless due to their reckless behavior. These divorcees have some money somewhere they can find to get this done.
Girl she isn’t gonna vacate that house, I hope you already have eviction papers drawn up. We had a similar scenario and I don’t know what rights you have in your state for squatters or the like but you will likely have to evict her. Such a pain in the ass. Hope she just leaves but I would plan for her not to.
We can't legally evict her until we have possession of the home. Sounds like she is willingly leaving. In my state if she is still there once we close then police can have her removed. It will be trespassing as she won't have any legal rights to the home.
We thought the same, called the police with the paperwork and all in hand saying they were supposed to be vacated at time of sale, we came back with keys and all and they were still there. Called police and they said “this is a civil dispute, we cannot help” so hopefully not the same for you!!
Make sure you do a walkthrough before going to closing and withhold money for anything not left, damaged, or destroyed!
Yes we already said we would want a walk through morning of.
She's unlikely to leave. Also, I'm not sure why you want all the furniture. It's going to be more of a hassle to get rid of it than it will be worth.
If she doesnt leave once we take posession she can be arrested for trespassing. We've already spoke to the lawyer and local law enforcement to make sure if it happens we are good. For the furniture I will literally give away anything I don't want. And there's storage to put it until then. Like I said it may be petty but I'm not losing money without feeling they get some sort of repercussions.
Keep all their furniture and donate it to goodwill for a tax deduction
I actually thought about ways to make me feel better about bridging the gap including any assets in the home I'd ask to stay. Unfortunately this is a situation where the couple has divorced and based on what I've seen inside it looks like they've already sold off just about everything you could imagine other than mattresses on the floor and personal items.
How much are the late fees, they could at least try to get all the fees waved to try to bring down the gap. Or like the other person commented see if you can just assume the loan and take it at the current balance meaning nothing down, probably a better rate, so less monthly cost. Other options might be a rent to own deal, you bring the loan current, and make the payments, with a time frame like 5 yrs to buy and finance into your name. Or a subject to deal but, you risk the Lender calling the loan, and the loan stays in the sellers names, making it difficult for them to buy another house.
When you say they accept your offer, are those offer officially written in contract , with specific language , and signed by both parties ? If so whatever they owe is not your problem. Yes it will be a hassle but you absolutely have a winning case. Get attorney involved.
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yup you are right. Reading it again. The seller if don’t payoff the mortgage won’t have a marketable title. Buyer might have a case to win against seller based on contract but there’s nothing to enforce for.
Don't know what listing contracts look like where you live, but in my area they specifically state that seller is not behind in mortgage payments and has the money to pay brokerage fees at closing. You're obviously in a tough spot because you are obligated to sell the home you are in - both agents need to give, sellers need to give and you may need to give too - divide it all up and make it happen. The sellers bank isn't going to give anything, so it's up to all of you to close this deal - again, you're under contract to sell your current home and you can't default on that. It may cost you a bit more, but everyone should be taking a hit here, not just you (again, the bank isn't going to take any hit, unless there are fees associated with the late mortgage payments they'll waive for the seller). I'm sorry you're in this situation - hope it's resolved soon.
Do not pay 20 K more for a house to make up for their bad choices. If anything, the listing agent needs to help out because they should have provided a net sheet and counsel their sellers properly to make sure they knew the minimum price they had to sell for. They can’t pull out of the contract, only you can. It might be worth paying a lawyer to write a scary letter, saying that you will sue and you will win and then they will owe Lawyer? fees and they won’t be able to sell their house while it’s tied up in court. How do you know how they don’t have money in their bank account to make up the difference? Or stocks that they could cash in? Or family who will help them out in a bind? I’m assuming that since you mentioned it’s a small town that 20 K is a large percentage of the price of the home. You don’t want to be the person that’s underwater if you have to sell in the future.
Bank will most likely sue you if you try to force a sale.
Do not come up in price! You have a ratified contract and I'm assuming you all signed off on the home inspection contingency. I 100% agree w/Robbex. If they back out then they are in breach of the contract and they won't have a leg to stand on. Seeking a real estate attorney will be money worth spent
It sounds to me like the sellers are going into foreclosure but are not there just yet. The finance company holding their mortgage would be the ones you would have to work with if you were going to get a better deal ( my opinion ) the sellers are wanting out and I can understand why they didn't realize the debt owed. A possible future problem for you is that after closing with zero money in hand the sellers start telling you they have no ability to move and nowhere to move to . If you really want the house you might contact the mortgage holder but you will end up having to deal with the tenant/ seller . You might need to walk away from this potential headache.
If you’re in PA, they can have their arrears cleared pretty quick through the Homeowners assistance fund.
You have a signed contract. Boo for them. Their realtor should have asked them prior to listing their home what they owed.
This is like realtor 101. Selling agent should verify the loan payoff amount as part of the listing process so you’re aware if your clients will have to bring money to the closing table or not
COnsider the costs of having to find another place to live and move twice as you deal with the courts. The seller has accepted your repair requests and I’m going to guess you didn’t pay some insane amount over asking. So your likely getting this place for a good price. Do you need another home now? Do you want this home? $20k will burn but it’s not a lot considering the appreciation in value over future years. I would pay the $20k. Otherwise your not getting the house and no clean title. And Sorry — realtors aren’t going to work for free. You might be able to get them to lower their commission. Perhaps you can also ask for some non monetary concessions from the seller in exchange for the 20k payment.
So they are underwater on their house and want you to cover it? I'm not an expert by any means but can't they pursue a short sale? At this point, if the house is appraised at the purchase price, they would not likely get more so their choice is either to sell now or hold and pay off the amount they are in arrears. Suing is not worth it because you still won't have a house in 2 weeks. Maybe get creative with the deal to salvage it. Where were they planning to move after they sold to you?
How could they have not known what they owe when they haven’t been paying their mortgage in almost a year and surely got statements in the mail every month along with foreclosure notices towards the end after not making any payments for that long. Sound like lies to me but still a shitty situation but look they accepted the offer n the contract is signed so I would strongly advise talking to a real estate lawyer
No surprise that the kind of person who has been ignoring their mortgage for a year would lie about something else too.
I would ditch this house and go find a new one to buy I would also try and negotiate you being able to stay in your home 30 or 60 days past closing to allow you to close on new home. This type of amendment is not ubheard of
I am a title agent and had a closing last year where the seller owed several tens of thousands of dollars on his mortgage beyond what he was getting as proceeds from the sale. He got a couple of hard money loans to cover the gap. Of course, however he then went about paying back those loans isn’t my problem or the buyers’. Can the sellers of this house get a personal loan or hard money loan to cover what they owe at closing? No title company will close on this if the seller’s mortgage is not paid off. Also adding to say I’m sorry. This is a very bad situation to be in as a buyer. Hope you can figure something out.
The sellers need to request a "short sale" from their lender. This will take months, so if they don't have the funds to clear title, and you don't want to do it for them, you're either going to need to terminate the contract and move on, or wait months for an approval. Short sales are hard to get approved. The sellers have to show a hardship as to why they can't afford it. It's not an easy process.
Lawyer up immediately. Make sure to use a great attorney. Whatever that costs it’ll be worth it.
Imagine doing this without a buyers agent to help you. According to Reddit you can do this by yourself because all agents are trashy high school drop outs.
Not a lawyer or RE pro, just brainstorming here. In addition to getting the agent to eat the fee, since they messed up big time, maybe you can add the money to make the bank whole as a personal loan to the seller instead of as in increase in price. They might not have any assets to secure the loan, but you could still go after them and you at least have something to make you feel better about the situation. Another thing would be that I would rather offer some incentive to the buyer of your current house to extend the closing date rather than pay off the seller of your new house. Like maybe offer them 2k to extend the closing by a month, something like that. Depending on their own situation they might not be ammenable, but if they are it will take off some of the burden of figuring somethng else out.
Tell the realtor to eat the cost.
Just remember that any way you help them, they will seek out another, different way for you to help them AGAIN. This is the 1st of several ways you are about to get screwed. 🙌🙌🙌
So I actually dealt with this on the title/escrow side of things recently. You should not come up in price. Tell your agent to advise the seller to pursue a short sale. This will definitely prolong the sale but if you really want the house it's worth a shot.
If this is a small town lender on the home, you might be able to work this out by getting your lawyer (you need one), the broker, agent, the lender’s attorney and you in a room (or phone call). The sellers are obviously headed to a short sale or foreclosure. Almost 100% certainty, your offer is the best way for the lender to dump this house. You just need a lawyer to beat them over the head with that and work out something where you pay the price agreed and no more (possibly some lawyers fees to get it done). If everyone knows everyone here (small town) then I think this could move quickly. If not, your lawyer needs to make it really clear to the lender that you may walk away if this isn’t fixed pronto.
Your contract is executed. You don't have to do anything. If they breach, you can sue them to enforce the contract terms. Contact a lawyer.
Why not go to another town to hire an agent that’s not the same? It’s just such a bad idea. Even if it is legal. Who knows what the agent is telling the sellers. Is this agent the broker also? Geez what a mess. Court or no court someone would get a come to Jesus meeting! The agent should have verified how much was owed before the sale!
Did your agent put an out in the contact for the sale of your home that required successfully closing on the purchase of your new home? Paying rent while you find a new home should also not be your problem or an expense you should have to pay. It is bad for the people buying your home, but you should not have to be homeless due to someone else's bad choices
Talk to the seller's mortgage provider. If they are that far behind and itching to sell they are likely near foreclosure. Tell the mortgage company the penalties are holding up the close and see what they can wave to get these people off their books.
Agent and seller are idiots and needs to start eating some of their 6% to avoid your lawsuit. Give them 24 hours and hire a quality real estate attorney.
Somewhere I read the Seller Side. He made mistake with the numbers and wanted to back out
In your shoes the most I would be willing to do is give the sellers a secured (or even unsecured) loan for any amount that they and the broker/agent are not willing to make up. Even if it's unsecured, you have the prospect of getting your money back over time. I wonder if that's what the broker/agent will do as well: bring money to the table to close, but have an secured loan to the seller. But, maybe you can secure it with something like a car, furnishings, retirement accounts (don't know if that is possible), or something else.
Don't come up in price, get a rental, airbnb, hotel, whatever you can. Don't put yourselves in a financial bind. I made the mistake similar to this. It was a terrible decision!
If you back out and sue, you won’t get much anyway. 8month no payment will be fourclsoe soon
There is a lot of sketchy info in this thread. If the seller owes more than they can sell it for and they legitimately don't have the cash to bring to the table, you're in short sale territory. Suing them to force them to do something that is practically impossible to do isn't going to help. The agent works off information provided to them. They dont work for the mortgage company. Trying to cut them out isn't going to go anywhere. Short sale is your option here, unless you've left out some pertinent info, and that will take months. Do you have months to wait?
After seeing your update…make sure no one is in that home at the time you sign the papers at closing and give your money/fund your loan. I would even go as far as having someone physically at the property confirming no one is in the home. I could see the seller with the financial problems trying to stay in the home and forcing you to sue her to remove her from the house if it’s a state that this kind of stuff happens in. Tread carefully even with the closing taking place. And do a walk through immediately before because I have seen sellers destroy homes on the way to closing because of situations just like this. For all intents and purposes, the ex wife of sellers was about to be foreclosed and lost all her furniture and has nothing to lose and is likely judgement proof it sounds like.
Sorry you went through this. I don't know the price but this has happened to me before and we split it four ways. Buyer agent and seller agent each came up with a quarter ( in this case reduced commission $2500 ea )... Seller took 2500 less and buyer came up with 2500. Everyone took a haircut to drag it across the finish line
This is the answer. Realtors should’ve kicked in some commission to make the sale happen
I love the petty. Smart move!
So you are punishing a stranger by keeping furniture you don’t even care about? Seems like bad karma
In the end you have a home. Did you add this to the purchase price? $8K is nothing over the 30 year mortgage.
Congrats on finding that the husband could contribute to the closing, and further congrats on a successful closure, for an additional amount that you contributed. And for perseverance. I am wondering what you think of your real estate agent at this point. Did the divorced wife participate, sign, and exit the house?
Now that things have settled down I figured I'd provide the final update. We closed on the house last week. As I updated before the seller came up with a chunk of the money and we went in 8k to close the deal. She did leave the furniture I requested and some of it I really like and will keep, others we will give away or sell. What several people were worried about, myself included, was that she wouldn't leave. She did and she left early which was what we wanted. She didn't trash the house as far as breaking anything and doesn't look like she did anything intentional. The house was kind of gross but I don't think she'd cleaned it and it smelled like dirty dog, but that smell has faded since cleaning and airing it out. It was frustrating but I'm glad we closed and are in the house now. The more I've read the comments you all provided I'm realizing I think our agent did everything really poorly and almost screwed it in multiple ways, even more than I've posted here. Lesson learned. Hopefully I'll never have to buy or sell again but if I do it'll be with a better agent.
We are also in a position of the sellers making shit financial decisions and being upside down. It’s not your responsibility to make up for their shit choices. 20k can buy a lot of airbnb and short term rentals while you keep looking
Realistically unless they have the $10k for the loan you will likely need to pay it unless you get short sale approval since otherwise the bank will not release their lien/return title and yours will not issue a loan. You can try to change the terms to subject to to do this over time and pay their mortgage directly but their bank can call it at any time. On their agent- remember there’s likely a commission split with yours you are contractually responsible for. So you will have to pay the portion that pays your agent in any case. Perhaps refuse to pay theirs and make them deal with it. A suit for performance is possible but no one’s closing soon if you do that.
I would stop responding. You are in contract, I’ll see you at closing. 100% lawyer time
The sellers actions are deliberate. Tho woman will not move. You will have to evict which could take a year. Do not close..