A buyer was referred to me by her brother-in-law who worked for a major bank. Her circumstances at the time we met were that she and her two teen-aged children had had to move out of their rental apartment and each was living with a different friend or relative. However, she had just received a large insurance claim settlement and she wanted to use it to buy her first home.
We found a house that she liked very much. It was a short sale but the listing agent said the bank had already approved the short sale and told us the price the bank wanted. He assured us that there would be a short approval timeline. The home had been completely renovated when the owner’s employer transferred him to another state. The resulting hardship was the reason for the short sale.
The buyer got an accepted offer and an inspection was made. The house had no major issues except for some loose steps leading to the deck and, although the house had running water, “best practice” was to get the well and septic tested. Because the buyer pays for inspecting those systems, we negotiated a rider to the contract that gave her time after signing the contract to conduct the inspections and cancel the contract if the results led her to change her mind. On the advice of a friend, she called in a plumber who, in my opinion, was short on experience and misidentified the source of some water that only he had seen.
Although the short sale should have been well along, getting bank approval was taking time. The buyer had surgery scheduled and it appeared that she might not be able to recuperate in her new home with her children.
In the meantime, she was having telephone conversations with her sister in Texas who thought the price she was paying and the cost of the work that needed to be done was too high. Her brother-in-law and attorney assured her she was getting a great price. I showed her comparable properties and what buyers had paid for them. She struggled with the notion she was paying too much rather than educating her sister on the realities of purchasing a home in our market. Then, because of the added stress of the impending surgery and being separated from her children, she rented an apartment and informed her attorney she was walking away from the deal. He and I both explained that she would lose her $8,000 “earnest money”. We offered to negotiate a rental of the house until the purchase was complete so she could move in with her children. After all, the house had heat and water and a working septic system. We even suggested she buy the house and “flip” it. Based on the comparables, she could make a profit! She would not change her mind and simply stopped speaking to me, her attorney and even her brother-in-law.
Phyllis’s doubts about purchasing the house appeared to have begun with her sister telling her she was paying too much. That wasn’t surprising because those who live in other parts of the country simply do not understand our market. But, the home had been renovated and had everything Phyllis wanted. She only needed to use her own judgment and compare it to the other properties she had asked me to show her to realize that she was buying for a very good price. She also spoke to a friend who convinced her a plumber needed to see the house. I had to tell him what to check and where to look. He then stated that the work had not been done the way he would have done it. When pressed, he could not elaborate. NOTE: The permits on the renovation were closed which means the final plumbing inspection had been completed.
After input from family and friends, Phyllis’s stress level was so high, it is my opinion that she was unable to objectively consider her options. She ignored her team of experienced professionals to listen to well-meaning but faulty advice. In the end, that advice cost her money – her money, not theirs. Buying a home can be very stressful but buyers need to be willing to put some trust in those who know our market best and in their own observations and experiences.