Thursday, August 28, 2008

My Real Estate Nightmare (Part 3)

It took only 4 days after the disastrous turn of event on the purchase of my home to see another offer come our way. The selling of our home was truly turning out to be a real roller coaster ride of up and down emotions (which, as of this writing, has yet to end). In what was another "meant to be" moments I'm trying to infuse into this whole situation, we actually signed a new Promise to Purchase with a new buyer that was willing to pay more than our previous offer -- $2,000 more.

Well, that was exciting now, wasn't it?

Lesson 4: Never get excited until the money is in your bank account.

As before, we had to wait again until the home inspection was carried out on our home, however, this time around, we didn't have to wait the arduous 7-day period + 3-day reply to get the confirmation of a sale. By now, the exposed basement wall was completely covered by a fresh new layer of drywall and paint, so there was no longer any evidence of the latent defect that my home suffered with.

The 2nd inspection of our home was a little more thorough (although I've yet to actually see the report). In the end, only one major defect was uncovered: the roof. The shingles on the back half of my roof, which faces the sun most of the day, were beginning to curl. The inspector estimated only a few good years of life left, and would then have to be replaced. As such, the value of my home suddenly dropped. In an instant, I lost the $2,000 extra that I thought I had gained with these new buyers.

We then received word that the buyers wanted to take possession of our home 1 month earlier, and effectively "rent" our house back to us until we moved into our new home at the end of July. So we signed an amendment that on June 28th, our home was no longer ours, and I would be living "mortgage free" for one month.

Ok, so we were back to the $298,000 sale price that we thought we had a few weeks prior. Still not so bad, and we stood to make a $20,000 profit after taxes and commission. At least the house was sold.

Or so we thought...

Tuesday, August 26, 2008

My Real Estate Nightmare (Part 2)

After 40 days of our house being on the market, we had an accepted Promise to Purchase on the table. The buyer's had purchased our house for only $11,000 less than our original asking price. We were of course, elated and relieved. Then, anxiously waiting 7 days later (the maximum time permitted) it was time for the inspection.

One thing I should mention is that my house had unfortunately suffered from a latent defect that was revealed to me about a year ago. The original builders of the house had built a window in the wrong location in the basement, but didn't seal up the window properly when discovering their mistake. Thus, the concrete of the foundation and the now filled-up window didn't bond together properly. Over time, water would begin to infiltrate the seam of the window and leaked into the basement. I discovered this when the carpet began to get moist about 3 years after I took possession of the house. Needless to say, I had this repaired (and didn't bother suing), paid for by my insurance company.

Lesson number 1: Have your agent insist that the buyer's entire family NOT partake in the inspection process.

When the inspector showed up along with my buyers, other family member's showed up too -- most annoyingly, an over-protective, over-reactive mother. Before even stepping into the door, the mother began shouting things (within earshot of me) like, "what's with this bush? It's overgrown!" "I don't like that!" "What's with the colour of the paint?" These were obviously silly things, but annoying to hear -- particularly since her daughter had fallen in love enough with the place to want to buy it, and here she was ripping it apart.

So after the quickest inspection I'd ever heard of (about 45 minutes), the entire clan came downstairs and began to rip me apart. Well, to be more accurate, the shmuck of an inspector began to grill me in front of his clients about the fact that there was no GFI outlet in the bathroom. There was a concern about the basement, of course, but at that point, there were no tell-tale signs of any water-penetration. The bare wall in the basement was still exposed where the water was entering the house, but with the foundation having been properly repaired, injected with polyurethane, and no more water actually coming in, the wall looked like crap, but was fixed. A home inspection is a VISUAL inspection only, so the inspector could not comment on what had happened previously, but did nonetheless. I tried to defend myself by stating exactly what the insurance company had told me -- there was no significant damage to the basement, and nothing that should be cause of concern. There was also a healthy 10-year guarantee should the problem resurface.

Feeling attacked by an inspector and prospective buyers is not fun. I felt humiliated as well. And where was my agent in this whole debacle? Standing off to the side without saying so much of a word. Now I don't know if it was her job to step in an defend me, but it was obvious that the sale was now in jeopardy as was her beloved commission.

After waiting another anxious 3 days (the maximum time permitted), my agent received a text message saying that the buyer's have walked away.

Lesson number 2: Choose an agent who's sympathetic to her clients.

My agent relayed the tragic news to us in such a non-chalant manner, almost with a humourous tone in her voice, and even worse, around 9:00pm in the evening, that the phone call was almost worse than the news itself. Needless to say, we didn't sleep well that night. And the casual way in which she broke the bad news was even more disturbing.

The next day, the anger set in. I demanded to see the inspection report. What probable cause did the buyer's use to get out of their Promise to Purchase? By the end of the day, my buyer's agent's wife dropped off the inspection report. She was quite sympathetic to our situation, and sadly, much more so than my own agent.

The report was a complete joke. I was 2 1/2 pages long. It was filled with silly (albeit practical, I admit) recommendations, like "don't forget to lower your thermostats at night to save energy". However, this isn't the stuff that inspection reports are made of. Even I know this. And 2 1/2 pages?!? Not a single picture? Needless to say there was no valid reason for the buyer's to have broken their contract.

Lesson number 3: Go with your OWN instincts when selling real estate, not your agent's.

I wanted to sue, and I'm convinced that I would have won (I was later able to confirm this when speaking with the ACAIQ). This whole mess would have been over back in March. However, my agent persuaded me not to go down that road. Even scolded me a bit for even thinking along those lines. "If they don't want the house, there's no sense in trying to force them into it," I was told. So without so much as hearing the real reason for the buyer's to renege, they were forgotten. Apparently, these buyers were sadistic people who'd previously made 3 other offers on other properties, and ultimately backed away. We found out that day too that their agent had fired them. I guess we weren't the only ones who thought these people were insane.

What was even more comical was that there was no mention of the basement issues in the report. So it seems as though the buyer's listen to the mother as opposed to the inspector.

So we were back to square one, and were on the hunt for a new buyer, hopefully for one final time. This house HAS to sell. The next buyer WILL buy this house.

Or so we thought...