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Monday, January 23, 2012

Dear Real Estate Industry

You're mad at us, I know.  I can tell by the tone of the e-mail our realtor sent to my husband in response to our announcing that we're withdrawing our offer on the house we looked at last month.  Our realtor suggested (though never actually stated) that we were being unreasonable, and attempted to shame us into changing our mind by assuming that we were withdrawing our offer because we were not actually qualified for a mortgage and have "strung along the seller and the bank" all this time.

Here's the thing.  This house was a short sale.  It's been on the market for a year, and in that time has dropped its price by nearly $100K.  Even with that, the house was still overpriced, and we offered $15K less than the current asking price (a number which we still think is generous, considering that the house will need about $50K worth of repairs in the next five years).  But before we made the formal offer, we asked our realtor to find out from the seller if they would be willing to consider a low-ball offer, because we didn't want to waste anybody's time.  We were told to make the offer, and they would consider it.

This is my third time buying a home.  I've sold three already.  In every case, the initial offer was either accepted, countered, or rejected pretty quickly, and any acceptance was contingent upon the buyer securing their financing.  Yes, our offer was slightly higher than our pre-approval, but our mortgage broker didn't think that should be much of a problem and told us that once we had an accepted P&S he'd get to work at formally processing our mortgage for the entire amount.  He was operating under the same assumption I was: first comes the offer, then the acceptance, then the financing.  That's the way real estate transactions have worked for a long time, excepting some transactions where the sellers state up front that proof of funding must accompany all offers (this transaction was not advertised as such).

Our offer gave the sellers and their bank two weeks to approve our offer.  The sellers did their part in a day.  Their bank let the offer expire with no action.  We only found this out after we called our realtor on the day it was to expire to ask for an update.  He had nothing, because he hadn't been following up.  Acknowledging that those two weeks included Christmas, we extended the deadline on our offer until the middle of January.  This time our realtor called us on his own initiative the day the offer was to expire, to tell us that the bank hadn't done anything yet but that the sellers had hired an attorney to try to move things along.  The attorney called us a little while later and gave us a more detailed update: the bank wouldn't accept our offer until they'd appointed a negotiator, which he was optimistic would happen the following week.  After that, things should move much more quickly.  We decided not to formally extend the deadline of our offer, which gave us the option of pulling the plug at any time, or letting it ride and moving forward with it should the bank accept our offer later.  For the time being, we decided to let it ride.

A week later we got another call from the seller's attorney.  The bank still hadn't appointed a negotiator.  They needed more information before they would do so, and it could still be a few weeks.  An e-mail from our realtor informed us that some of what bank required was proof of financing and an addendum to the P&S stating that we would close within 60 days of approval.

We were fed up.  After failing to simply accept or decline an offer for a month and missing two contractual deadlines, the bank was demanding we guarantee a quick closing that would hinder our ability to fully inspect and assess the property, plus demanding proof of financing up front?  The whole thing reminded my husband of the scene in Empire Strikes Back when Darth Vader tells Lando Calrissian, "I am altering the deal.  Pray I don't alter it any further." 

Our realtor was offended at our offense, and informed us that "the bank is and has been working in a timely fashion...it is corporate America and procedure."

Well, corporate America, you have stated your terms, and we choose not to accept them.  Like Lando Calrissian, we believe this deal is getting worse and worse all the time, so we're getting out while we still can.

I don't care if you're mad at me, Real Estate Industry.  It's a sad day when a seller has to hire an attorney to get the bank to act on processing an already-approved short-sale.  It's an even sadder day when a buyer trusts the seller's attorney more than she trusts her own real estate agent.

I believe in honor, diligence, and good faith adherence to contractual obligations.  We have shown that.  So have the actual sellers of the house.  Real Estate Industry, you have not.  Your attempts to shame us have failed, because we cannot be shamed by an entity that itself has none.  Send us back the deposit we made in good faith, and go play your games with someone else.  If the game can only be played by your rules, then we choose not to play.  Despite what you may think and what you may want, we actually do have that option.

Have a nice day, and may the Force be with you.

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