Owner selling their house is being shady?

[jiuchan]

My sister and her family is getting a house. They finally found out and they are waiting on getting approved by the VA.

They were required to give $5000 deposit and that will go toward the closing cost.

They paid that already.

They were told to have an extra $6000 in their account so that they will get approved (not sure why but that's what they were told). Done!

They found out that they didn't get approved unless they pay off their car. So they asked for an extension until the end of this month. The owner agree since they just needed to pay $5000 left.

Last night, my sister got an email from the realtor saying that the owner changed their mind saying he will give her and my brother an extension until the end of this month but they have to pay an extra $100 per day after for two weeks. (the approval process takes 2 weeks and the owners knows about that).

do you guys think that the seller is being fair about this or is he being shady about the money he will earn? i'm partially confused in my opinion.

[natashaspy]

that really sounds odd...I think if it were me I'd ask for my money back and back out.  once things are agreed upon they shouldn't be allowed to keep changing things...

[JaniceSW]

I definitely agree with the answer before mine.  Took the words out of my mouth!!!!

[ktheodos]

definitely seems a bit sketchy...

[sgluckadoo]

He most likely wants to make money on the deal since he is essentially having to hold the house for them to buy. They could pull out of the deal and make an offer again later assuming it doesnt go under contract with someone else.

I once had a house on contingency for a couple to get their credit rating up, and because I did this, I lost out on other offers, but we all knew this going into the deal so they were asked to pay a nonrefundable to escrow, that they would lose to me if they did not follow through with the deal, to help offset my having to hold the house for them.

I do think he should have asked for this concession up front.

[Kay0338]

That sounds very odd to me. I don't know much about selling/buying houses, but I've never heard of anything like that before.

[hawkeye3210]

Sounds like seller received another offer.

[countrygirl12]

My sister and her family is getting a house. They finally found out and they are waiting on getting approved by the VA.

They were required to give $5000 deposit and that will go toward the closing cost.

They paid that already.

They were told to have an extra $6000 in their account so that they will get approved (not sure why but that's what they were told). Done!

They found out that they didn't get approved unless they pay off their car. So they asked for an extension until the end of this month. The owner agree since they just needed to pay $5000 left.

Last night, my sister got an email from the realtor saying that the owner changed their mind saying he will give her and my brother an extension until the end of this month but they have to pay an extra $100 per day after for two weeks. (the approval process takes 2 weeks and the owners knows about that).

do you guys think that the seller is being fair about this or is he being shady about the money he will earn? i'm partially confused in my opinion.

The seller cannot do that.  If it is going thru a real estate company there is a set agreed upon price.  The seller cannot charge them $100 a day unless that was in the paper work they originally signed.  None of what you said makes sense.  The seller cannot state they have to pay off their car either.  The bank can make that stipulation before loaning them the money.  The only thing the seller can do is say they want x amount down ie $5000 or whatever to show they are interested in making the purchase.  Because they are taking the house off the market while they wait on your sister to get the loan and if something falls thru the seller can miss a sale from someone who can get the money.  Went thru this about 10 years ago.   The difference in me was I was ALREADY APPROVED for the amount I wanted to borrow so I didn't have to try to get the money and go thru all that nonsense.  If I ever sell my current house I will ask for a letter from the bank they are getting the money from stating they are pre-approved and also $5000 non-refundable deposit.  If the supposed buyer is not serious then don't waste my time.

[countrygirl12]

He most likely wants to make money on the deal since he is essentially having to hold the house for them to buy. They could pull out of the deal and make an offer again later assuming it doesnt go under contract with someone else.

I once had a house on contingency for a couple to get their credit rating up, and because I did this, I lost out on other offers, but we all knew this going into the deal so they were asked to pay a nonrefundable to escrow, that they would lose to me if they did not follow through with the deal, to help offset my having to hold the house for them.

I do think he should have asked for this concession up front.

They cannot pull out of the deal if they signed a contract.  Not without losing the money they put down.  That is why you put money down.  So if you back out the seller gets paid for the time they had their house of the market.  The house I have now there was a contract on it before me.  The people buying it got into it and decided to divorce while the house was under the contract and before it closed.  They lost their deposit.  And they should have.

[metsrock69]

First of all, if it sounds to shady, tell them to hire a lawyer. also, i hope they have a receipt for that $5000.00 . hope it works out for them.

[debidoo]

Sounds greedy at the least if not shady - it is not unusual for lenders to make additional requirements for potential buyers but it is unusual for sellers to take advantage like this - I'm sure your relatives want the house but I don't believe they should agree to this exorberent fee the seller is wanting to charge.  Don't they have someone helping protect their interests?  Well best of luck to them whatever happens.

[BlackSheepNY]

Anything where you have to keep shelling out money to satisfy another party is just plain crazy.  If I were them, I'd get my money back ASAP and run as far away from this one as I could get.  There's plenty of other homes they can buy without having to do a "very strange" song and dance to get it.

[CharmedPhoenix]

My ex and I had real estate licenses, in California, years ago.  I also researched real estate investing opportunities.  The real estate laws vary some from state to state.  Each lender also has their  own requirements so it's hard to say exactly what's allowed in this case, especially since we don't know what state they're in.

Pre-approval is the wisest way to go.  Then you know what you can and cannot afford and you're less likely to have expensive delays.

The deposit sounds reasonable.

Paying off their car loan reduces their monthly obligations.  Lenders have formulas for what percentage of your monthly income you can afford to commit to payments on large purchases such as cars and houses.  Paying off the car loan gives them more room for mortgage payments.

Having a required amount in the bank gives the the appearance of being able to make so many mortgage payments even if there's a loss of income.

The debate here seems to be about the extension fees.  Your sister entered an escrow agreement before securing financing.  The financing is taking extra time.  Your sister now needs the seller to hold the house for her.  The seller is wiling to do that, until the end of the month, then he's been advised to charge a daily fee if they need another two weeks.  (...the owner changed their mind saying he will give her and my brother an extension until the end of this month but they have to pay an extra $100 per day after for two weeks)  This is incentive to get their loan approved quicker.  The seller could be renting the place out, but it's sitting there costing him money instead of making money.  He may have other buyers or simply need to get on with his life.  He may need the money for something, like a house he's buying, and the delays could be costing him money or worse yet causing him to lose out on an opportunity.  We also do not know how long this has been going on so the seller may be tired of all the delays.  He could have been ready to quit the deal because it's dragging out so much, but the addition of the fees gives him incentive to be patient a bit longer.  It's a stressful process on both sides of the deal.

[sgluckadoo]

He most likely wants to make money on the deal since he is essentially having to hold the house for them to buy. They could pull out of the deal and make an offer again later assuming it doesnt go under contract with someone else.

I once had a house on contingency for a couple to get their credit rating up, and because I did this, I lost out on other offers, but we all knew this going into the deal so they were asked to pay a nonrefundable to escrow, that they would lose to me if they did not follow through with the deal, to help offset my having to hold the house for them.

I do think he should have asked for this concession up front.

They cannot pull out of the deal if they signed a contract.  Not without losing the money they put down.  That is why you put money down.  So if you back out the seller gets paid for the time they had their house of the market.  The house I have now there was a contract on it before me.  The people buying it got into it and decided to divorce while the house was under the contract and before it closed.  They lost their deposit.  And they should have.

I meant they could pull out of the deal if he is making a new change to it as he seems to be.

[countrygirl12]

He most likely wants to make money on the deal since he is essentially having to hold the house for them to buy. They could pull out of the deal and make an offer again later assuming it doesnt go under contract with someone else.

I once had a house on contingency for a couple to get their credit rating up, and because I did this, I lost out on other offers, but we all knew this going into the deal so they were asked to pay a nonrefundable to escrow, that they would lose to me if they did not follow through with the deal, to help offset my having to hold the house for them.

I do think he should have asked for this concession up front.

They cannot pull out of the deal if they signed a contract.  Not without losing the money they put down.  That is why you put money down.  So if you back out the seller gets paid for the time they had their house of the market.  The house I have now there was a contract on it before me.  The people buying it got into it and decided to divorce while the house was under the contract and before it closed.  They lost their deposit.  And they should have.

I meant they could pull out of the deal if he is making a new change to it as he seems to be.

After I responded and then went back and read your comments again I saw that. lol.