Wednesday, October 15, 2008

My Real Estate Nightmare (Part 6) - The Final Chapter

With my brother-in-law now in the process of cleaning up the gigantic mess that everyone who was previously involved in my real estate nightmare made, things were finally starting to look brighter. His first plan of action was to sort through all the contracts, the lawsuits, the errors, and establish a time line of exactly who screwed up, and when.

At the root of the problem was a bank (Scotia Bank) that issued an unconditional mortgage, only to retract it 1 1/2 months later. But by that time, we had already purchased our new house and were essentially locked into paying two simultaneous mortgages. From my limited knowledge, once a bank issues an unconditional mortgage, there shouldn't be any financing issues down the road, right? Right?

Second, was a real estate agent (mine) who did very little in tracking down the problems, fighting for my rights, protecting me, calling the bank to find answers, or dealing with the other agent in a pro-active manner.

Third, was a real estate broker (mine) who was untrustworthy, and acted in the best interest of his agent (mine), as opposed to the client (me).

Fourth, was another real estate agent (the buyer's) who kept promising things and failed to deliver.

Finally, was a buyer who kept stressing the fact that he wanted to buy my house, but did nothing concrete to prove his sincerity. Throughout this process, I took it upon myself to believe that this man was acting in relatively good faith. I was the only one who believed in his intentions, and the fact that he got shafted on the sale of his own home, was a situation that was not creating malicious intent on my side.

After the signing date had passed, we solicited the services of a lawyer to draft a "lawyer's letter" that would render the original Promise to Purchase null and void, and essentially claim compensatory damages from my buyer on an on-going basis until the house was sold. Believe it or not, the cost of carrying mortgages was going to amount to about $70/day!

We would only legally be able to resell the house if the buyer had acknowledged receipt of this letter. But tracking the buyer down was another issue. His agent was sketchy in giving us his address (be it at home or at work), and during this time, the buyer wasn't answering his phone so we couldn't contact him directly. So for about a week, we were on a manhunt. We even had the lawyer send the letter by bailiff, but even the bailiff came up empty-handed. Were we going to be locked into selling our house to this buyer for the rest of our lives?!?

Finally, a breakthrough. The buyer acknowledged the receipt of the letter to waive the Promise to Purchase via email, which was apparently enough to stand up in court, should we have resold the property and the buyer contested it was his all along.

With our freedom now restored, we listed the house back on the market (now for a 3rd time) at the beginning of August. Because we were now paying 2 mortgages, the goal was to obviously sell our house as quickly as possible -- and if lucky enough, even sell it for a higher price. Along the way, my brother-in-law's girlfriend had also become a real estate agent becoming the better half of a tag team real estate team. She had great vision when it came to home staging and properly decorated my now empty house. We also did some minor renovations to bring the house into mint condition. We were very encouraged, although, as luck would have it, selling a property in a supposed hot area proved to be a challenge.

It was now September, and our house hadn't had so much as an offer on the table, and of course, we were getting pretty antsy. Oddly enough, the old buyer was still in the picture. Despite being sued, and no longer legally bound to buy my house, his agent (who had gone silent for about 2 weeks) emailed my brother-in-law out of the blue stating that my buyer had received a verbal approval on a new mortgage (by the aforementioned Scotia Bank), and was still intent on buying the house.

Well, we've heard that song and dance before. Frankly, I was getting tired of being strung along. So we took appropriate action -- we demanded that the buyer sign a new Promise to Purchase and within it, he would agree to compensate me for all my damages up front. While a good idea in principle, it would take about another 3 weeks after that suggestion (as well as a personal meeting between my brother-in-law and my buyer's agent) to convince the buyer that this was the most logical (and legal) way to go. The buyer was fearful of being sued again, this time by my old realtor and old real estate agent for her lost commission on the botched sale. (NOTE: as of today, we still do not know if they will in fact sue or not). However, my brother-in-law was pretty convincing in that my old agent would not have a valid case (due to her massive amounts of incompetence), and we finally got a new Promise to Purchase. (At this point, ANY Promise to Purchase was a godsend). At the end of September, we all met at the property to sign all documents in person and to make sure that everything was legit.

One thing that reassured me was that you could see the look of regret and remorse in the buyer's eyes as I stared at him across the rented dining room staging table. By the end of the signing, he even apologized. While it looked like a pretty safe bet that the house would officially be sold at this point, what irked me was that I'd be incurring a financial loss over this whole mess -- at no fault of my own. With over $8,000 accrued in unnecessary staging costs, renovations, insurance, lost interest, extra Hydro fees, and of course, an extra mortgage, the buyer had offered only $2500 in compensation. With our hands tied, there was really no point in negotiating. I wanted the 100-ton monkey off my back, and I wanted it now.

By the end of September, the buyer officially got his financing. This time, the bank confirmed, reconfirmed, and reconfirmed the financing was in place, and it was just up the notary to request the funds. So we set up a signing date for October 6th, which just happened to be my son, Ethan's 2nd birthday. I took that as a sign of good things to come.

The morning of October 6th, my wife, my agent and I drove to the notary's office. We had a meeting at 10:00am. The obvious trepidation at this point would be whether or not the buyer would show up to the office to give us his signature and cheques. By 10:03am, and the buyer hadn't yet walked through the door. With a tremendous bout of anxiety setting it, I walked out of the office and took to the street. By 10:05am (the longest 2 minutes of my life), I spotted him out of the corner of my eye walking up the street towards my location -- and I quickly bolted back into the notary's office to make sure he hadn't seen me. A massive sigh of relief overcame me and I annouced to my wife and agent "he's coming."

By 11:00am, the deed was done. After several months of stress, anxiety, and harrowing ups-and-downs, my real estate nightmare finally came to an end.

As a final lesson in all this, I can only offer one piece of advice to someone who is buying or selling a home -- to surround yourself with people you trust implicity. Make sure that those working on your behalf know what they are doing, and that they've got nothing but your best interests at heart. And if you think the worst thing can happen, it probably will -- so prepare yourself for it.

PS: We are currently awaiting the results of an internal investigation at Scotia Bank for their negligence that was a catalyst to our situation. We decided that if we couldn't fully claim the damages from the buyer, we could do so from the bank. If the world works the way it should, we will get back all of the money we lost at no fault of our own. Keep your fingers crossed!