Weird Home Buying Situation

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Aupilot7
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Joined: Wed Mar 04, 2015 1:16 am

Weird Home Buying Situation

Post by Aupilot7 »

This one’s got me perplexed, and while I think I know the answer, I’d love to hear someone else opinion with this unique situation.

I went under contract on a new home build in Alaska (moved there from the lower 48), site unseen in person. The market is hot in the area and I was really pleased with the builder, floor plan, etc. The realty company asked for $4,000 earnest money, pretty standard, which I immediately wired to them the same day. I sent them the bank statement later that month and they confirmed they received the money. However, after a week or two, $4,000 was mysteriously wired back into that same account I sent it from. I immediately called the realtor and informed them of their mistake - I didn’t want this deal to fall through over something stupid. They got back to me and informed me that, according to their records, everything had been paid and they didn’t know what was going on. Several months went by and I nearly forgot about it. I closed on my house, moved in, and had been living in it for about a month when I got an email I had been expecting in the back of my mind. The realty company figured out that I never paid my earnest money (wow, good job guys, I only told you that 4+ times) and of course they want it now. I’m going to do the right thing regardless, and it’s only $4k, but I was really disappointed in the way they handled the home buying experience (There were a lot of extras I wanted and was willing to pay for but was told by realtor it would be “impossible,” only to find out after talking to builder that he totally would have done any of the things I wanted had it been brought up earlier...realtor just never even bothered to mention it.) I’m not smart on the legalities of it, but I assume The builder and bank got everything they were owed and the realty company is temporarily out that cash. I also assume I signed something along the way that still held me liable for any mistakes made during the closing process but idk. While I’m going to pay regardless - it’s money I owe - I’d gain a little happiness just knowing that I could have told the realty company to screw off after they were so dishonest to me.
HomeStretch
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Re: Weird Home Buying Situation

Post by HomeStretch »

Congratulations on your new home.

You know $4k is still owed so it sounds pretty straightforward to pay the balance due.
cogito
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Re: Weird Home Buying Situation

Post by cogito »

Earnest money is typically held in escrow to be used towards what is due after the transaction is complete. Are you going to be net -4k if you pay this, or will the builder be? This is a separate and unrelated question from whether or not you were satisfied with which upgrades you got during the construction.
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unclescrooge
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Re: Weird Home Buying Situation

Post by unclescrooge »

I would complain to the licensing board about your agent. Seems totally unprofessional.

The escrow company is probably short the deposit and only just realized their mistake.
mortfree
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Re: Weird Home Buying Situation

Post by mortfree »

Does the paperwork show the 4k escrow being applied to the overall purchase?

If it doesn’t then you shouldn’t have to pay it again.

Realtor didn’t sound trustworthy so tread carefully here too.
Sprucebark
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Re: Weird Home Buying Situation

Post by Sprucebark »

Was it the real estate company or the title company? Usually you pay the title company not the real estate company.

What part of Alaska?
neverpanic
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Re: Weird Home Buying Situation

Post by neverpanic »

Aupilot7 wrote: Wed Nov 11, 2020 12:33 am While I’m going to pay regardless - it’s money I owe - I’d gain a little happiness just knowing that I could have told the realty company to screw off after they were so dishonest to me.
No happiness gain on that question. You owe, you pay, you get back to enjoying your new home. That's your gain.

Ledger mistakes happen.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
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jfn111
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Location: Minnesota

Re: Weird Home Buying Situation

Post by jfn111 »

Sprucebark wrote: Wed Nov 11, 2020 1:45 am Was it the real estate company or the title company? Usually you pay the title company not the real estate company.

What part of Alaska?
Here in MN the real estate company holds the earnest money in the Brokers trust account. Usually, the money never goes to the title company because it is less then the commission that is owed so the title company just deducts that amount when they cut a check to the agent.
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8foot7
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Re: Weird Home Buying Situation

Post by 8foot7 »

Here in NC typically the earnest money sits as an uncashed check with the agent/broker's office. What probably happened is that the 4k was deducted from the agent's commission when the title company or attorney settled out all of the funds and the agent/broker finally realized they never had the 4k.

I would not bother to incur a wire fee to return the 4k and would instead send a check via mail, and I might even deduct any incoming wire fee I was charged by the mistaken return, but yes, this is straightforward enough I would return subject to those conditions.
IowaFarmBoy
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Re: Weird Home Buying Situation

Post by IowaFarmBoy »

If I were in your situation, I would want to make sure the money got to whoever it was really owed. It seems that the process can vary a lot from state to state. I might talk to whoever handled the closing (title company, lawyer, etc.) to understand the local process and determine who it is owed to before I paid. My guess is that it is the real estate company since they are the one who noticed but I'd like to be sure.

And congrats on the new home!
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hand
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Re: Weird Home Buying Situation

Post by hand »

It seems clear that you owe the money, but less clear who you owe it to - what if you pay the $4k to the realtor and somebody else has the right to collect the $4k?

Personally, I think there is a moral responsibility to feed some negative feedback into the system about the realtor's poor performance otherwise others are likely to be subjected to the same. If you have the time, force a conversation with the broker and explain that it is difficult for you to believe the realtor's collection notice given the 1) multiple assertions that everything was in order, 2) and what appear to be multiple other lies told by the realtor. If they want the money, have them clearly explain to you how you are protected from other collections for the same $4k.
TheCowbell
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Re: Weird Home Buying Situation

Post by TheCowbell »

You owe the money legally and morally, regardless of their ineptitude.

That said, what's it like living in Alaska?? Does the approaching winter make you nervous at all?
MarkerFM
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Re: Weird Home Buying Situation

Post by MarkerFM »

You had an unprofessional Realtor, and that's unfortunate. I find that, in general, professionals in smaller, remote locations don't perform to the same standards you would find in a larger, more competitive area. I don't know if it's self-selection or laziness on their part, but it is part and parcel of living in locations like that.
FeesR-BullNotBullish
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Re: Weird Home Buying Situation

Post by FeesR-BullNotBullish »

hand wrote: Wed Nov 11, 2020 9:39 am It seems clear that you owe the money, but less clear who you owe it to - what if you pay the $4k to the realtor and somebody else has the right to collect the $4k?

Personally, I think there is a moral responsibility to feed some negative feedback into the system about the realtor's poor performance otherwise others are likely to be subjected to the same. If you have the time, force a conversation with the broker and explain that it is difficult for you to believe the realtor's collection notice given the 1) multiple assertions that everything was in order, 2) and what appear to be multiple other lies told by the realtor. If they want the money, have them clearly explain to you how you are protected from other collections for the same $4k.
+1
Sprucebark
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Re: Weird Home Buying Situation

Post by Sprucebark »

MarkerFM wrote: Wed Nov 11, 2020 10:26 am I find that, in general, professionals in smaller, remote locations don't perform to the same standards you would find in a larger, more competitive area. I don't know if it's self-selection or laziness on their part, but it is part and parcel of living in locations like that.
Yup. You get a lot of that in Alaska. It’s definitely full of “end of the road” types who couldn’t make it anywhere else. Same goes for lawyers, real estate agents, police, doctors.
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FIREchief
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Re: Weird Home Buying Situation

Post by FIREchief »

Aupilot7 wrote: Wed Nov 11, 2020 12:33 am I went under contract on a new home build in Alaska (moved there from the lower 48), site unseen in person.

There were a lot of extras I wanted and was willing to pay for but was told by realtor it would be “impossible,” only to find out after talking to builder that he totally would have done any of the things I wanted had it been brought up earlier...realtor just never even bothered to mention it.
How exactly did you decide that this realtor was who would be representing you?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
j9j
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Re: Weird Home Buying Situation

Post by j9j »

hand wrote: Wed Nov 11, 2020 9:39 am It seems clear that you owe the money, but less clear who you owe it to - what if you pay the $4k to the realtor and somebody else has the right to collect the $4k?

Personally, I think there is a moral responsibility to feed some negative feedback into the system about the realtor's poor performance otherwise others are likely to be subjected to the same. If you have the time, force a conversation with the broker and explain that it is difficult for you to believe the realtor's collection notice given the 1) multiple assertions that everything was in order, 2) and what appear to be multiple other lies told by the realtor. If they want the money, have them clearly explain to you how you are protected from other collections for the same $4k.
Great post. Make sure feedback is given on the experience so it helps other and no further claims can be made. Thanks
marcopolo
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Re: Weird Home Buying Situation

Post by marcopolo »

You bought a house site unseen?!?
Presumably, did not meet the builder?!?
That, to me, is the most interesting part of this post.

Glad it worked out well for you.
Not the approach I would recommend for a new home construction.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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