Author Topic: Question for anyone with real estate (financing) knowledge (Read 1952 times)

Tre · « **on:** October 26, 2007, 05:46:22 AM »

What is a 'reconsideration form'?

danielson · « **Reply #1 on:** October 26, 2007, 05:46:54 AM »

Any more information Tre?

Tre · « **Reply #2 on:** October 26, 2007, 05:59:29 AM »

The quick-and-dirty:

1) I get a call from the realtor Wednesday afternoon notifying me that a missing notarization has pushed my closing back a day to Friday. I consider this administrative error to be a minor inconvenience.

2) I get a call from the realtor Thursday afternoon informing me that the seller only intended to give me credit for the closing fees and not for any portion of the down payment amount. She says that the HUD-1 forms didn't match up and says that I "might have to bring in more cash to close", but says that if she can get in touch with my lender, there's a 'reconsideration form' that the lender can generate in order to get the numbers to line up properly.

3) I get a second call from the realtor later Thursday afternoon informing me that there was actually an accounting error between the lender and the title company. So, now the story has nothing to do with the $13,000 credit to me from the seller, but instead, there was a $6000 shortfall because the title company didn't request enough from the lender. Realtor states, "The good news is that you might not have to bring in more cash to close". I inform realtor that I am *not* paying anything more, under *any* circumstances. I had to call the movers to cancel our Saturday move, so now we're talking major inconvenience.

---

This all came in late yesterday afternoon, so by the time I spoke with my attorney, I was unable to speak with the title company or lender, so I do not know what their stories will be. But when the realtor says that the lender has to submit a 'reconsideration form', I'm led to believe they're asking the seller to reconsider the terms of the sale. That does NOT sound to me like, "Oh, Wells Fargo mistakenly forgot to send $6000."

danielson · « **Reply #3 on:** October 26, 2007, 06:14:31 AM »

Well, if you are escrowing, it is very possible that they didn't figure out exactly how much you needed to come in with. That could be a reason you need to bring in some extra money, taxes and insurance, although the person who structured the loan would have to be pretty dumb to let the number get too out of hand( 6 grand?). Unless, it is an LTV thing, maybe they didn't have much to play with to keep you under 95% or 90%, or whatever. It's hard to tell when I don't know the details.

I wouldn't worry about the reconsideration form, but make sure you see it and don't sign anything that is different in any way from the original docs you signed, UNLESS it is days collected for taxes and insurance, there is nothing brokers can do about that and don't make a dime from it, so there is no reason to worry about that. With the amount of concessions you are getting I am surprised you are coming in with any money at all (other than down payment, if any), but like I said I don't know anything about the deal.

bigdumbbell · « **Reply #4 on:** October 26, 2007, 06:16:39 AM »

i know nothing but it's merely a standard legal vehicle for the purposes of correction.

Tre · « **Reply #5 on:** October 26, 2007, 07:32:54 AM »

Quote from: bigdumbbell on October 26, 2007, 06:16:39 AM

i know nothing but it's merely a standard legal vehicle for the purposes of correction.

Thanks, bdb - that's what the realtor was indicating, but she's played fast and loose with the truth all the time I've known her.

danielson · « **Reply #6 on:** October 26, 2007, 07:39:13 AM »

Quote from: Tre on October 26, 2007, 07:32:54 AM

Thanks, bdb - that's what the realtor was indicating, but she's played fast and loose with the truth all the time I've known her.

Yes, but why Tre? How can there be a 6,000$ difference? Are you making a down payment or is this 100% financing?

Tre · « **Reply #7 on:** October 26, 2007, 07:46:21 AM »

Quote from: danielson on October 26, 2007, 06:14:31 AM

Well, if you are escrowing, it is very possible that they didn't figure out exactly how much you needed to come in with. That could be a reason you need to bring in some extra money, taxes and insurance, although the person who structured the loan would have to be pretty dumb to let the number get too out of hand( 6 grand?). Unless, it is an LTV thing, maybe they didn't have much to play with to keep you under 95% or 90%, or whatever. It's hard to tell when I don't know the details.

I wouldn't worry about the reconsideration form, but make sure you see it and don't sign anything that is different in any way from the original docs you signed, UNLESS it is days collected for taxes and insurance, there is nothing brokers can do about that and don't make a dime from it, so there is no reason to worry about that. With the amount of concessions you are getting I am surprised you are coming in with any money at all (other than down payment, if any), but like I said I don't know anything about the deal.

I went to the escrow office and signed all my papers last Saturday. That gave them 3 full business days to ensure all the paperwork was in order. At that time, they gave me the cash to close number, which I brought in on Tuesday.

By the numbers:

I'm putting 10% down
The seller agreed to pay me $13000 back at closing
The realtor is to pay me $2000 at closing

Pre-paid taxes, interest, and insurance were all accounted for on the HUD-1 I signed.

---

Update:

Ok, realtor emailed my wife after the 1st call yesterday (I'm just seeing the email now) wanted me to sign a revised HUD-1 form (that she had attached) where I'm getting only $8900 credit from the seller and would agree to pay the other $4100 myself. That *never* had a chance of being signed by me....the realtor knew when she sent it that there was no way in hell I was going to pay another dime to close this deal. If the buyer's side was short FOR WHATEVER REASON, either the money would come from the realtor or the deal would fall through.

They didn't send anything for me to sign following the 2nd call (where they now claim that it's a lender error).

At this point, I want to give them a deadline to get this sorted out, because if the realtor was 'representing' me as she claims to have been doing so far (laugh), then this never should've happened...and in no universe should I be getting a call *after* the scheduled closing to tell me the money isn't right, given that I paid my obligation into escrow a full 48 hours before the scheduled close.

Tre · « **Reply #8 on:** October 26, 2007, 07:51:21 AM »

Quote from: danielson on October 26, 2007, 07:39:13 AM

Yes, but why Tre? How can there be a 6,000$ difference? Are you making a down payment or is this 100% financing?

10% down

I'm very confused as to why the 2 stories were so different. On the one hand, the escrow officer is claiming that the seller is going back on their promise to pay $13000 and will now pay only $8900, but on the other hand, they're saying that they (title company) didn't request enough from Wells Fargo and so the total funding ended up being $6000 short when they got ready to pay the seller.

danielson · « **Reply #9 on:** October 26, 2007, 07:55:08 AM »

Quote from: Tre on October 26, 2007, 07:46:21 AM

Update:

Ok, realtor emailed my wife after the 1st call yesterday (I'm just seeing the email now) wanted me to sign a revised HUD-1 form (that she had attached) where I'm getting only $8900 credit from the seller and would agree to pay the other $4100 myself.

In Michigan, we can only use 5% sellers concessions, anything else needs to be handled outside of closing, any chance that they are using the 8900$ in concessions, and then giving you the 4100$ outside of closing? If not, I would try to figure out why the hell they think they can just charge you and extra 4100$ dollars. Also, I am assuming it is an expensive house, cuz the realtors around here never give money back, so congratulations.

Rearden Metal · « **Reply #10 on:** October 26, 2007, 08:00:01 AM »

Stick to your guns Tre. The only way I'd give in and pay the additional is if the property's value far exceeded the price I was paying and I wanted to get in very badly.

danielson · « **Reply #11 on:** October 26, 2007, 08:01:07 AM »

Quote from: Tre on October 26, 2007, 07:51:21 AM

10% down

I'm very confused as to why the 2 stories were so different. On the one hand, the escrow officer is claiming that the seller is going back on their promise to pay $13000 and will now pay only $8900, but on the other hand, they're saying that they (title company) didn't request enough from Wells Fargo and so the total funding ended up being $6000 short when they got ready to pay the seller.

Well, that is Titles fault. My title company fucks up all the time, redrawing the docs only takes an hour or so though, unless the loan amount is right at 90% ltv where its at, and the 6 grand would push it about a 90 and change the rate or even disqualify you. Chances are they knew you would be bringing in the money and just figured you would be easy going about it, cuz 6 grand is just to big of a fuck up. Although, if you added in the 4100$ that they took off, that would bring it closer to 2 grand I am assuming. Sounds like they are fucking with you man, but I hope everything works out.

Tre · « **Reply #12 on:** October 26, 2007, 08:26:25 AM »

Quote from: danielson on October 26, 2007, 07:55:08 AM

In Michigan, we can only use 5% sellers concessions, anything else needs to be handled outside of closing, any chance that they are using the 8900$ in concessions, and then giving you the 4100$ outside of closing? If not, I would try to figure out why the hell they think they can just charge you and extra 4100$ dollars. Also, I am assuming it is an expensive house, cuz the realtors around here never give money back, so congratulations.

During the 1st call, the realtor stated that the seller agreed to pay 'up to $13,000 of the closing costs' and was trying to differentiate between the closing costs and the total cash to close (which includes the down payment, of course).

The home price is only slightly above the median for our area (Sacramento suburbs), but I guess that is still a bit higher than the national median.

The realtor has been nothing but shady. When I decided to go for this home, she said that the seller was offering her an incentive if I would agree to close by the end of October (but then they actually wanted it a week earlier...a 20-day escrow).

Keep in mind that I found this home on my own and the wife actually monitored the price drops over the past 9 months. The realtor is basically along for the ride. She said to us, "the incentive is a couple thousand dollars, so I'll split it with you". She already knew that I verify everything, which I started doing after catching her in some lies before, but she tried to act pissed off when I found out that the bonus was actually FOUR thousand dollars. I was at home when I found out and called her immediately to find out what kind of game she was running. She smarted off a couple of times and although I wanted the full four thousand, I agreed to a compromise amount of $2000.

Even taking back $2000, though, the brokerage is still WAY overpaid on this deal. She complained that I was trying to 'take her entire commission', and I told her flat out that her company's services were worth nowhere near the $17,000 they stood to make on the deal if I hadn't demanded some back. She said that the $2000 would come out of her half of the total commission and I told her that was between her and her firm.

I won't ever use an agent again (unless I'm out of the area and absolutely cannot get a deal done on my own), but trust me when I say that I've got a full list of tips and warnings that every first-time or inexperienced buyer should know before getting into a deal with a realtor.

bigdumbbell · « **Reply #13 on:** October 26, 2007, 08:27:52 AM »

stick with loan sharks the paperwork is air tight

Tre · « **Reply #14 on:** October 26, 2007, 08:37:24 AM »

Quote from: Rearden Metal on October 26, 2007, 08:00:01 AM

Stick to your guns Tre. The only way I'd give in and pay the additional is if the property's value far exceeded the price I was paying and I wanted to get in very badly.

Thanks, man. If anything else has to be paid from the buyer's side - even $1 - then it has to come from the realtor, because my checkbook is officially closed.

I'm getting this one for $150,000 less than the original sale price, but still overpaying by about $20,000 in the current market. I'm paying a bit extra because it's never been lived in (it's been sitting empty for 2 years). As long as it gets back to the 2005 sale price within the next 6-7 years, I'll be fine with that.

The situation in SoCal was bad, but down there, people made enough money to afford $400-500/sf homes. Up here, it was completely unrealistic for them to think the region's economy could support $200-300/sf. The salaries up here and nowhere near what people in SoCal earn...they *never* should've bought all these $500,000+ homes with those ridiculous ARMs, etc.

My realtor tried to sucker me into taking one at $175/sf back in March and I told her I wasn't paying more than $150/sf. I ended up getting this one for $128/sf.

Tre · « **Reply #15 on:** October 26, 2007, 08:38:28 AM »

Quote from: bigdumbbell on October 26, 2007, 08:27:52 AM

stick with loan sharks the paperwork is air tight

LOL

Oh, this realtor is a shark alright!

I need to start writing my book now...

danielson · « **Reply #16 on:** October 26, 2007, 08:42:34 AM »

Quote from: Tre on October 26, 2007, 08:26:25 AM

I won't ever use an agent again (unless I'm out of the area and absolutely cannot get a deal done on my own), but trust me when I say that I've got a full list of tips and warnings that every first-time or inexperienced buyer should know before getting into a deal with a realtor.

Agents are good for certain things, although if you have a good broker they can make sure you get your concessions and everything works out fine, assuming you are able to find the house you want without professional help. Seems to me you are paying 17,000$ to the realtor and an unspecified amount to the broker and still have to deal with the headaches that comes along with going it alone. It is not uncommon for these things to happen, but a bit unprofessional. With all these deals being made after close, I would make sure I knew where the 4100$ is going and why you are 6 grand short, although I am pretty sure that is an LTV thing or they would just up the loan amount. When I first started writing mortgages, I was at a 40% commission, which is horrible, I am am 80% now. Anyway, when I was that low if I knew the people I was refinancing, I would simply on the day of the loan tell them I would broker credit them 3 grand or whatever if they gave me half of it back. That way, they were getting more money and I was avoiding taxes and getting a few extra bucks. I hope no one is making deals outside the closing with your money.

Tre · « **Reply #17 on:** October 26, 2007, 08:52:19 AM »

I've been using 'broker' and 'realtor' interchangeably, the realtor being the agent I'm using and the brokerage being the company she works for.

She did say something about possibly increasing the loan amount, but again, she already knew there's no way I would sign off on that.

They love the fact that I signed on with them when I knew jack shit about the process, but they hate like hell that I've educated myself throughout the process.

Rearden Metal · « **Reply #18 on:** October 26, 2007, 09:53:45 AM »

Quote from: Tre on October 26, 2007, 08:37:24 AM

Thanks, man. If anything else has to be paid from the buyer's side - even $1 - then it has to come from the realtor, because my checkbook is officially closed.

I'm getting this one for $150,000 less than the original sale price, but still overpaying by about $20,000 in the current market. I'm paying a bit extra because it's never been lived in (it's been sitting empty for 2 years). As long as it gets back to the 2005 sale price within the next 6-7 years, I'll be fine with that.

The situation in SoCal was bad, but down there, people made enough money to afford $400-500/sf homes. Up here, it was completely unrealistic for them to think the region's economy could support $200-300/sf. The salaries up here and nowhere near what people in SoCal earn...they *never* should've bought all these $500,000+ homes with those ridiculous ARMs, etc.

My realtor tried to sucker me into taking one at $175/sf back in March and I told her I wasn't paying more than $150/sf. I ended up getting this one for $128/sf.

That's a respectable price. The place I'm bidding at is ~200/sf currently, & I'm probably going to underbid since I think the market is still dropping here (down valley from Aspen, CO).

Good luck man.

Tre · « **Reply #19 on:** October 26, 2007, 10:16:45 AM »

Hey! I took the family home shopping in CO back in January and even then, I was amazed at how much home you guys get for the money (I liked Ft. Collins and the newer areas in Aurora).

I need to get out to Aspen at some point...always wanted to see a Christmas there.

---

UPDATE

Story 1 was the accurate one: I spoke directly to the title company and the seller is refusing to pay the full $13,000. So, the $4100 shortfall has to come from the seller, the seller's agent, the buyer's agent, or some combination thereof.

My pen is out of ink.

Tre · « **Reply #20 on:** October 28, 2007, 12:43:01 AM »

Although neither side has yet signed any documents to that effect, the deal has fallen through.

Oh well.

danielson · « **Reply #21 on:** October 28, 2007, 12:48:42 AM »

Quote from: Tre on October 28, 2007, 12:43:01 AM

Although neither side has yet signed any documents to that effect, the deal has fallen through.

Oh well.

Why did it fall through? Was it the 4100? or the 6 grand shortfall?

Tre · « **Reply #22 on:** October 28, 2007, 04:42:09 AM »

Quote from: danielson on October 28, 2007, 12:48:42 AM

Why did it fall through? Was it the 4100? or the 6 grand shortfall?

I contacted the seller's agent on Saturday (still haven't heard from mine yet) and she said that the number is closer to $6000. The title company has not sent her the 2nd revised HUD-1, but according to her quick calculations, the lender, title, and escrow fees were only about $7000.

Her client directed her to re-list the property on Friday (tantamount to suicide in this market! lol), but she urged them to delay that based on the fact that none of us has had a chance to see the final settlement sheet yet. The holdup seems to be with the title company.

It's gotten very complicated, but at the end of the day, I'm not willing to pay even $1 more for this property. If it was such a 'great deal', it would not have been sitting empty for the past 2 years.

Tesla · « **Reply #23 on:** October 28, 2007, 07:32:13 AM »

Quote from: Tre on October 28, 2007, 04:42:09 AM

It's gotten very complicated, but at the end of the day, I'm not willing to pay even $1 more for this property. If it was such a 'great deal', it would not have been sitting empty for the past 2 years.

That's a good attitude to have. Sometimes you just have to draw a line in the sand and be willing to walk away from a deal. Sounds like you need a new realtor, too (or maybe go without one).

youandme · « **Reply #24 on:** October 28, 2007, 08:44:10 AM »

Amazing how these deals get so skewed from the start, and just snowball.

Tesla's right you played it correct before hand, and can't be afraid to walk away. That fear of "we are going to loose this house" sets in and people make bad deals for themselves.

Hope you find a good deal