Homebuyer Alan Jacobson wants to tell the world, "Always use a Realtor." After weeks of disputes, he outlines his side of the case on a website called FSBOgonewrong.com where he and the seller are now in a spaghetti western standoff.
Mr. Jacobson claims that the following happened:
- Buyer made offer of purchase with addendum for sellers to make repairs. Sales price: $441,000.
- Buyer and seller agree to use the same attorney to close the transaction
- Home is inspected, problems found
- Buyer hires contractor to work on third floor
- Contractor dies, after cashing retainer check
- Hires a second contractor of Middle Eastern descent
- Buyer notes progress is slow on seller's repairs, expresses concerns repairs will be completed by closing
- Mutual attorney suggests buyer does a walk-through inspection
- Seller denies buyer walk-through inspection
- Seller threatens contractor and hurls racial slurs
- Mutual attorney recommends seller retain separate counsel
- Seller hires new counsel
- Seller denies lender's appraiser to view the property before closing, then relents
- Buyer has property inspected, significant findings threaten sale
- After some back-and-forth, seller offers to lower price to compensate for discrepancies
- Agreeing to a new price, $420,000, closing is scheduled
- Buyer prevented from doing final walkthrough prior to closing due to keys not being available
- Second closing scheduled; keys still not available
- Buyer asks intermediary to talk to seller
- Seller tells intermediary -- no papers signed, no walk through; expressed irritation that buyer had "badmouthed" the house
- Buyer hires new attorney
- Buyer's attorney calls seller's attorney several times, gets no response
- Finally, buyer and seller attorneys agree to a walk-through prior to closing
- Buyer finds during walk-through that all utilities are off, can't inspect mechanics of the house
- Buyer told by seller's attorney to call utility company, but only seller's attorney has access to house
- Buyer asks for termite inspection; finds inspection report completed 15 days prior to first closing date
- Termite report bad
- Lender refuses loan until termite problem fixed
- Buyer's lock rate on loan runs out
- Structural report suggests termite damage extensive
- Buyer's attorney requests price reduction to cover new costs
- Seller refuses price reduction or to sign a mutual release of liability and termination of the agreement
Jacobson says, "If the seller really wants to sell this house, he needs to compensate me for all my costs and make the repairs necessary to satisfy the lender."
He explains, "The contract I signed doesn't provide any relief or remedy when the buyer acts in bad faith. For instance, the contract says a termite inspection is required and the buyer must pay for it. But it doesn't require the seller to pay for any termite damage. Furthermore, the contract explicitly absolves the seller for any responsibility for structural damage. My lender requires a "clean" termite letter, which the termite inspector will not provide until the structural issues are resolved. But I am reluctant to do this at my own expense to satisfy the lender when I don't even own the property. I'm not a lawyer, but from a literal reading of the contract, the seller has satisfied it, even though he did not disclose the termite damage, nor did he provide the structural engineer's report before I lost the lock on my mortgage, in spite of assurances from the seller's attorney that this report would be provided before I lost my lock."
"Suing the seller would be a problem, says Jacobson, according to his attorney."
"We can only sue for 'specific performance.'"
"In this case, we threatened to sue because the seller had not provided the termite inspector's report and the structural engineer's report. Neither were provided before the first three scheduled closing dates, but they were ultimately provided, albeit not before I lost my lock."
"So we can't sue for failure to perform on those grounds. The contact states that 'TIME IS OF THE ESSENCE' but it isn't more specific than that."
"I can force him to sell the property for the contract price of $441,000. That's $21,000 more than the negotiated price, but we don't have the negotiated price as an amendment to the contract. This was strictly a verbal agreement when the first closing fell through."
"So if I sue, I can get the house -- maybe three years from now when the case is heard -- and pay $21,000 more for it, plus I'm not likely to get all my fees reimbursed even if I prevail."
"While I might win in the court of public opinion, my case on strict legal grounds is not as solid according to my attorney, because the contract I signed was not a standard REIN contract," says Jacobson. "Yet another reason to ALWAYS USE A REALTOR."
Could the seller sell to someone else?
"Legally, the seller cannot sell to someone else because he is bound by this contract," says Jacobson. "However, he was legally bound by this contract to do many, many things that he didn't -- and that is clearly documented -- so I wouldn't put anything past him. If he sold to someone else, I would have to document how I was damaged by his actions. I could show $10,000 in damages, but it might cost just as much to bring such a suit with no guarantee of winning it. So that isn't a slam-dunk option."
When Jacobson asked his lawyer about building FSBOgonewrong.com, the lawyer told him "to go ahead, because it would be therapeutic." Says Jacobson, "It would get it out of my system and prevent it from continuing to eat at me. And he was right."
But that doesn't mean he doesn't have regrets.
"A Realtor once told me, 'You'll know you've found your house when you can see yourself living in it.' And that's my problem," says Jacobson. "I can see myself living in Mr. Rhyne's house. I can see my girls in their new, big bedroom that my girlfriend offered to decorate. I can see the girls running up and down the stairs. I can see us entertaining in our new dining room -- the most elegant room in the house with high ceilings, crown moulding, window seat, etc. I was even looking forward to working with the contractors to redo all the floors, finish off the exterior, etc."
"So, it's tough just to walk away from this deal."
