Our Buying & Selling Nightmare

stephfMay 4, 2012

Disclaimer: This is just me venting. I absolutely understand that there are people out there who have had much worse luck than this.

Our second child was born last March and we decided soon after that we were going to need more room than our 1000 sqft house could provide. We started actively looking for a new home in July 2011. We knew we were going to be a bit more specific when we were looking this time around (after living and learning from our 1st house) and anticipated that it would be a longer process, but had no idea how long it would take! Between July 2011 and March 2012 we made 4 offers, all of which we lost out to other buyers because we made our offers conditional on the sale of our house. By the time we made our 5th offer, and after reassurance from our agents and everyone else that we would have no problem selling our house (we still have a very hot market here), we decided not to include this condition and our offer was accepted.

We listed our house and had tons of interest, but no offers. After being on the market for about 3 weeks (most houses in our neighbourhood and price range sell in the first week), we dropped our price a bit and received an offer. We were ecstatic because we were starting to get nervous and we accepted the offer that gave us the exact price and closing date that we were looking for. The offer we received was conditional on financing, home inspection, and the sale of her house. Originally we had decided not to accept any offers that were conditional on sales of previous property simply because we didn't have the luxury of time - the closing date on our purchase was fast approaching - but she already had an offer on her house that was conditional only on financing and was expected to firm up within a week, so we went with it.

Fast forward 1 week. Our buyer secured her financing and our house passed inspection with flying colours. Her buyer, on the other hand, didn't get approved. We were absolutely speechless. Our purchase is closing in about 3 weeks, and our deal is on the fritz. Our buyer still wants our place, so we've given her an extra 2 weeks to sell her house (she got an offer after only 3 days last time), but if she can't sell in 2 weeks (and get a closing date that works for us - we're only allowed to bridge our financing for 30 days) we are screwed!

We've learned so many lessons from this clusterf**k of a situation. Number 1, we will never make an offer on another house that isn't condition on our sale. Ever. Number 2, we will never assume that someone will get approved for financing, even if the house they're buying is $100K less than the average house price in the city and rates are 3%.

It's crazy how things can go from being so great, to so crappy in a matter of hours...

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When there is one buyer, there are others.

    Bookmark   May 4, 2012 at 10:37AM
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"Number 1, we will never make an offer on another house that isn't condition on our sale. Ever. Number 2, we will never assume that someone will get approved for financing, even if the house they're buying is $100K less than the average house price in the city and rates are 3%. "

#2 certain is sound, but #1 is really just a matter of what your personal finances will allow. eg if you own your current home outright or if you can swing 2 mortgage payments at once.

    Bookmark   May 4, 2012 at 10:44AM
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Sophie Wheeler

I think that the lesson you really should have learned here is that to never go shopping without money in your pocket.

If you want to move, then sell your house first. If you can't easily afford two mortgages, then don't buy a second home while you still own the first in any form. Yes, it's more hassle to sell and move to a rental and then househunt, but it's the much more financially secure way of buying a house unless you have a high income that can easily take care of two house notes.

    Bookmark   May 4, 2012 at 12:08PM
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Hollysprings, surprisingly, that's not something I would change. We were looking for a home with specific features and inventory was very low. If we sold first, we would have had to either impose on family for God knows how long (and with 2 kids - one being an infant, a dog, and a cat, that wouldn't have been very nice of us), or use a short term rental (and at approx. $600/week, we're better off paying 2 mortgages!)

    Bookmark   May 4, 2012 at 1:22PM
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Whatever you do I wish you the best.

    Bookmark   May 4, 2012 at 3:16PM
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Find a 12 month rental while you look for a home. And then break the lease when you close on the new home. You lose your security deposit but it sure beats the other options.
Shame on your agent to try to predict the future as far as when your house would sell.
Where is it that the market is so hot?
Good luck.

    Bookmark   May 4, 2012 at 6:08PM
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Note about renting for 12 m and breaking the lease if you find a house to buy ... In some states the landlord can go after you for the balance of the lease - so you could be on the hook for however many months of rent. It's not too hard for a landlord to get a judgement against a renter who leaves, so it hits your credit report (and in some industries that can affect your employability).

I only know this because it happened to a sibling who broke a lease.

    Bookmark   May 4, 2012 at 9:04PM
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We're in Ontario, Canada (just north of Toronto), and the market is still pretty insane here. We didn't have it as rough as our neighbours to the south.

    Bookmark   May 7, 2012 at 11:19AM
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We have friends of our daughter who owned small house in DFW TX area. Husband got job transfer to FL about 2 yrs ago...the market in DFW was still decent but FL was soft, really soft...
They went to look--found house close to our daughter which was really nice since they have been BFF since 5th grade...
they put contingency contract on the house in FL and the sellers were desparate...they had already taken job in other part of FL and had house on market for months w/no offers...
Our friends got offer on their home for almost asking price--and the buyers basically had no contingency--were paying cash...they were Middle Eastern and parents were helping them apparenlty...their agent was squirrelly and a real PITA...
Our friends were supposed to close in DFW then close in FL--the husband was working there and living with our daughter while the wife and son were still in DFW...
When it came time to close the buyers of their house couldn't close because their money had not been in a US bank for 30+ days...money has to be on deposit and verified for that time for various reasons...

SO our friends could not close in FL--
they had to apply for their financing as well because their loan was only guaranteed for specific time--and wouldn't extend...
the buyers lost their earnest money since it was their fault they couldn't close...they still wanted the house though so they persued buying it...

our friends managed to extend with the FL sellers at same price becuase they had no other offers knocking on the door...
They did eventually close both houses--
and because they had to reapply our friends were able to get a lower mortgage rate than their first one--and they had the earnest money to use to pay for the new fees and stuff...
so all in all, they made out pretty well...
but they were just lucky...in different market their buyers could have walked away and looked for another home or they could have lost the house in FL if the sellers had been in different situation...

    Bookmark   May 13, 2012 at 12:57AM
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