Posted by Kristie Hampton on August 08, 1997 at 19:35:22:
In Reply to: Lease Option: posted by on July 25, 1997 at 13:04:49:
We moved into a very cute home with all intentions of buying, however after living in the home for 2 years, we found this house to have so many problems!!! septic is in such a mess that we would have to spend thousands of dollars to fix, septic needs a comptlete new drainage field!!
The living room used to be a garage, which means the ac that comes with the house does not apply, and the home is full of termites, I did not make these problems, am i still obligated? I guess I will see this sept 8th 1997, any advice will be welcomed.
what are renters laws?, am I a renter , or a buyer? Originally submitted by Steve Schmidt in 1996
: MUST READ -- BEFORE you get into a Lease Option!
: Wished more Readers would take the time to help others learn from their mistakes. Thanks Steve!
: "Her House"
: Submitted by Steve Schmidt
: Hello fellow investors.
: This is a true story that happened to me. A friend of mine read this and told me that you may find the information helpful. If it
: can help any of you to stay out of trouble, well here goes.
: Sit back and relax. This story took over a year to unwind.
: It was someone my wife knew. A manager at the other pizza place, not a friend. They came to her several times to sell her their
: house. They wanted to go to Arizona. She wanted to go look at it and then she told me the price. $74,000. It was an $80-90k
: neighborhood. Now I too wanted to look at it. They wanted $6,000 down and assume FHA. $2,000 up front and $4,000 in
: the form of a note (2nd mtg.) We looked and the place was a dump. It needed carpets, paint and landscaping. No serious
: damage though, so we went for it.
: Well we did a lease option: $1,000 option money 100% applied to price (1st mistake) and moved in to fix the place up (2nd
: mistake). We had to do a lease option because we were broke. We had a lease option on another home that we had been
: living in for about 9 months. A beautiful 3000 sqft., not quite custom, but nice. We could keep either one and didn't have
: enough money to repair the dump to sell it, so we flipped the 3000 sqft.(double closing).
: Readers digest version:
: We moved into the dump. We started repairs, slowly, as I said, we were broke. When the option was about to expire I got a
: 30 day extension. We tried for another 30 day extension a month later, but the seller said no. I told her OK, we'd close on
: Sept. 9th (as per our extension agreement). A couple of days before I called the title company to find out how much I needed
: to bring to the closing. They said they had never received the papers from the seller, but if they got them right away we could
: still close on the 9th. I called the seller and had the papers sent. A couple of days later the title co. called me and said that even
: though they received the papers from the seller, they couldn't get the assumption papers by the 9th and we'd have to extend. I
: called the seller and we set a date, verbally, for a week later (third and worst mistake).
: That's when the shit hit the fan. The seller decided they were going to sell to a real-estate broker. The broker's RE company
: held a second on the property and he picked up on the delay of closing.
: Somehow, I wonder how, the seller found out that I had foreclosures on my credit file. She had no intention of selling to me
: after that. Even if I got her all cash at closing for her equity.
: Side Note: We had worked for well over a year. We had VISA and a couple of other accounts. A mtg. co. was going to give
: us a loan on our other house. Our credit was looking great. There is hope for people with foreclosures.
: We went to a lawyer and recorded our contract against the property as we were instructed. The broker bought the house
: anyway. The title company issued a policy subject to our recorded contract (now a lien). Our first lawyer couldn't help us as the
: RE co. was Re-Max and they did a lot business with them.
: We found another lawyer and farted around for about a year before they gave up. We ended up signing the property over to
: the other side. We were out of money. Funny how the lawyer was excited about our chances at the beginning.
: Our lawyers reasoning was: Right after the closing date I talked with the seller to try and save the deal. I said we can work this
: out. We talked about other ways to do it. She said "write it up 3 or 4 different ways and send it to me. I'll have someone that
: knows more than I do look at it". I agreed. That meant we didn't have a contract any longer, at least that's what the lawyer tried
: to tell us. B u l l s h i t. But now I'll never know what the judge would have said.
: These are a few of the rules that I have adopted for future use.
: 1.) Show up at all closing dates, whether the seller will or not. Seems the title co. did get and have all the paperwork on the
: original closing date. Everyone wanted to know why I didn't show up. It doesn't make a damn difference that the seller didn't
: show up. Titles companies should go right along with lawyers. They'll tell the truth that fits the set of facts they want to use at the
: time. They told my first lawyer a completely different story than they told my second lawyer. Seems Re-Max does a lot of
: business with title companies also.;-)
: 2.) Lease options are OK, but if push comes to shove you may still have to go to court to get the property in your name.
: 3.) Next time instead of moving into the dump, I'll flip the dump and use the money as a down on the nice house. I could have
: brought in an elephant and got something for the dump, it was CHEAP. We didn't have the down on the nice house, that's part
: of the reason we sold it. To this day, every time we drive by the nice house my wife still affectionately refers to it as her house.
: 4.) If anyone says we can't close on this date for any reason, file suit that day. In order to stand on specific performance, you
: have to push HARD. I dealt my wife and four kids into a rental house. Next time I will be the one holding the bat beating the
: hell out of them. Or at least I'll have the option to.
: The only good note: That broker paid his lawyer at least $10,000 in our fight. Our lawyer willingly wrote off $12,000 in legal
: fees. They were afraid of getting fined by the court for their screw ups (sanctions.)
: But: Considering that the broker sold the property for $119,500 (paid $74,000) within a month, that's not much. :=(
: It's funny, I have no problem finding great deals. I just have to get better at holding on to them.
: Point of interest: I have all the paperwork from my lawyer (very large box). Many, many good notes. "Peter is getting tired of
: this case".
: Although I had no idea at the time, when we listed and sold the 3000 sqft. nice house, this broker was trying to stop the sale.
: The people we bought it off were in contact with him and I guess he wanted the commission to re-sell it for them. I had other
: plans for it. Maybe that's another good point?
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