we have an offer on the house. red flags?

[Morning Sunshine]

We accepted an offer today on our house.  It is full asking price (YEA!), and they want to close in 2 weeks, taking possession in 24 hours.  but there are some weirdnesses.  tell me what you think

• the showing was an older guy, dad-like, maybe mid 40s and a teen girl 15-17, no wife or mom.  They did not spend a lot of time in the house, but did stand on the drive talking to their agent for about 10 min after.
• we bought the house at 370, listed it for 340, and our agent says that houses like ours are not selling for more than 310, IF WE ARE LUCKY.  and they offered listing price.  which almost never happens, much less in the current housing market
• the offer is made in the name of a business
• this is a cash offer, and as far as we know, no verification that they actually have the cash, like there would be on a loan
• they only put down $500 earnest money, with inspection and appraisal to be done by Nov 29.
• they, according to our agent who got from their agent, are living in temporary housing, like an extended stay hotel
• their agent, J, says that as an extended family, they have offers on a few houses.  what is that about??

I think that is all, but there may be more.  what do you think?  This is very weird.  on the other hand, I don't want to rock the boat too much - it is tough selling a house right now.

[Bradbn4]

Just a 500 dollar fee to lock up the house - for a 2 week period - not too bad of a hold time.  So they might be making a few offers and more than willing to eat the earnest money to try and get the best possible house.

Odd that there was no wife - unless they are house hunting at the same time.

I have made an offer on the house above list price - and still lost out on the deal.  Good ranch - but the MC'D was too close - wonderful yard - but I could smell them french fries a cooking.  I lost out because the other person placed the same bid - but put an extra 25k down - so his loan would be lower.

The house that I did buy, I offered 25k less than asking.  I did up my price by 5k, and with finger's crossed, I only have 4 more years until it is paid for.

Brad - In Colorado

P.S.  Your right, something does not quite feel right - but i hope you end up with a clean sale.

[4bull]

There is a scam out there where they ask for deposit back in cash, then cancle the check.

Im still in the middle of loan prosses still.
I own one its on contract of sale now.
1 is storage, 1 is a rental, 1 the 110 year old monster we live in and a bissness down town.
then i have more with a partner. 
the new AO is 3 1/2 acers 4 bed,2 1/2 bath barn and nice shop. 
Listed for 300,000  bought for 149,500.   4 hours from here.

There out there if you look.

[LdMorgan]

We accepted an offer today on our house.  It is full asking price (YEA!), and they want to close in 2 weeks, taking possession in 24 hours.  but there are some weirdnesses.  tell me what you think

• the showing was an older guy, dad-like, maybe mid 40s and a teen girl 15-17, no wife or mom.  They did not spend a lot of time in the house, but did stand on the drive talking to their agent for about 10 min after.
• we bought the house at 370, listed it for 340, and our agent says that houses like ours are not selling for more than 310, IF WE ARE LUCKY.  and they offered listing price.  which almost never happens, much less in the current housing market
• the offer is made in the name of a business
• this is a cash offer, and as far as we know, no verification that they actually have the cash, like there would be on a loan
• they only put down $500 earnest money, with inspection and appraisal to be done by Nov 29.
• they, according to our agent who got from their agent, are living in temporary housing, like an extended stay hotel
• their agent, J, says that as an extended family, they have offers on a few houses.  what is that about??

I think that is all, but there may be more.  what do you think?  This is very weird.  on the other hand, I don't want to rock the boat too much - it is tough selling a house right now.

You are wise to question anything that seems odd.

I take it they want to close in two weeks and then take possession 24 hours later. That does not leave you much time to pack up--and it puts you in the position of having to pack up (at least in part) before the house closes. That is a little odd.

You should scout the business. Find out if it's actually a going concern, find out who owns it. You should know what people you are dealing with. You should have the ID of the man, and he should be demonstrably connected to the business. If he isn't double the night guard, and have everybody with a briefcase searched. Twice.

Every offer is a cash offer--unless you're doing their financing. Where they get their money doesn't matter, but they have to pay in full at closing, or their is no closing.  If you doubt their ability to pay, let them know that payment will be accepted by electronic transfer from their bank to yours before you close. That's two phone calls from the lawyer's office: Theirs to instruct the transfer, and yours to confirm the receipt of the funds.

Hmmm. If they don't like the inspection and/or appraisal, do they get their $500.00 back? They should have done that before they put earnest money down. If they walk, keep the cash--unless you are fine-printed into having to refund it.

They may be shills for a bank or a corp. that's buying up property. Disney did a LOT of that to get the FL property for Disney World without running the land prices up. They used 400-odd shell companies as "buyers".

They may also be part of a religious group that is relocating its congregation into the area. The older guy and the young girl could be a simple case of a single parent family. Even if that family is part of an extended one.

[Morning Sunshine]

well, LDMorgan,

on the 2 weeks + 24 hrs thing, I have already moved non essentials to a storage unit (book shelves, books, extra dressers).  gotten rid of big pieces of furniture (couches, guest bed; we still have our beds and 2 dressers).  My food storage is either at my parents (6-gal buckets) or my SIL's (everything else); nice thing about being LDS no one blinks if you have a years supply of food you have to move/store temporarily  .  But it does mean that we will have about a day to actually get the rest of it out.  to hire a truck and movers or corral friends/neighbors into helping.  and that is worrisome.
And actually, we were prepared for this.  last time we moved, they wanted us out in 6 days from the time they made an offer.  having had a baby just 6 days prior to that, I balked and put my foot down, and got 4 weeks.  But we wanted to be prepared for something like that again.

we can keep the earnest money.  but $500 is almost nothing to the hassle of packing 4 kids and a house for a fraudulent buy, KWIM?

We thought about the single parent family thing.

I don't know.  Mostly, it "seems to good to be true"

[Wrender]

As a Realtor I have some experience here.

You should require them to provide you with proof of funds.  If you haven't accepted their offer as of yet make it contingent upon them providing proof of all funds via. a letter from a bank stating they have $X available for the purchase (Personally I would want something like this within 24 hours of acceptance). 

Additionally, look at any and all other contingencies they have built into the contract.  Are they asking for an inspection period?  If so how much time do you have to remedy any problems they may find?  Forget about all the personal / subjective details in the deal.  If they have the cash they can afford to buy the property.  However, you DO want to make sure that you are protecting your ass(ets) and have a verifiable timeline until you are fully in contract.  Make arrangements to move but don't start pulling cash out of pocket before all of their contingencies are used.  For example if they have an inspection period make sure that you have something in writing verifying that they are either satisfied w/ the inspection (in short waiving the contingency) or are simply waiving it.  If they are fully in the contract with no other contingencies (all inspection periods - proof of funds - etc... have gone through) then you technically have the right to that $500 if they walk away from the deal. 

The last place I sold was similar.  Cash offer 2 week closing period.  However, in this market cash deals sometimes work far better than financed deals.  You don't have to wait for them to obtain financing, don't have to worry about the ever changing rules behind the appraisal process, don't have to worry about FHA, VA, or even a conventional lender balking at the insignificant.  My advice, in an uncertain market that is showing little to no signs of improvement, a cash deal at asking price is fantastic if they actually have the money and don't put too many contingencies into the deal. 

My 2cents...  Good luck!

[survivininct]

The places I have sold, the buyer takes possession at closing, so I don't know what this 24 hr thing is about?  If I am buying a house, I will be the only one in it after I deliver the cash - no squatters - even for a minute!

As far as the deal, who cares?  If they give you a certified check, then your good to go.  Tell your attorney the story, just to be safe.  I do not think they can come after you for money if the money came from a less than honest means.  What would happen, is they would take the house and sell it to recoup the loss. 

[Have-Gun-Will-Travel]

Wife is a Division manager for a national title company (owned by one of the nations top builders)
they do not take certified check anymore, all wire now.
They had way to many fraudulent certified checks, the last one she told me about is the closer caught one that it did not look right
so she called Bank of America and the said no check with that number was issued.
 

[reefmarker]

So, what happened?  It has been more than 2 weeks.  Did this all work out, or was is a scam?

I bought a house 3 years ago with a friend as the realtor that I truly trusted, and it was still very scary. 

[Morning Sunshine]

well, a few days after the original offer, there was an addendum.  they pushed out the closing date to "On or before December 17th" so that they could get their cash through homeland security.   
see all the money is offshore in foreign banks.   

but there was no appraisal done, and we have heard NOTHING else from them.  My agent has been calling and calling their agent, and she either ignores his calls or knows nothing.  their agent is legit - she has worked with my agent a number of times over the past 10 years, but, as my agent said "she is a really nice person, but not a good Realtor."

My neighbor is a realtor, and when we were talking, she said there was a guy who has made offers on houses before, full-price, cash offers with foreign money, that is just jerking people around.  that he pushes out the dates and pushes and never does anything else.  hmmm, sounds familiar, yes?  she said she has only run into one herself, and seen 2 others, but this fits what she has seen.

so, there is a possibility that we close on Friday.  I do not think it is going to happen.  dh and our Agent do not think it is going to happen.  But, if it does, I think I can be ready.  I have spent the last 2 weeks cleaning and organizing the house.  the basement has been emptied into 2 rooms at the front of the house; the upstairs has only 2 dressers and our beds.  it is our offices and my kitchen that will be a pain.

meanwhile, on Saturday, we are putting up our Christmas tree. 

[Have-Gun-Will-Travel]

well, a few days after the original offer, there was an addendum.  they pushed out the closing date to "On or before December 17th" so that they could get their cash through homeland security.  
see all the money is offshore in foreign banks.  

but there was no appraisal done, and we have heard NOTHING else from them.  My agent has been calling and calling their agent, and she either ignores his calls or knows nothing.  their agent is legit - she has worked with my agent a number of times over the past 10 years, but, as my agent said "she is a really nice person, but not a good Realtor."

My neighbor is a realtor, and when we were talking, she said there was a guy who has made offers on houses before, full-price, cash offers with foreign money, that is just jerking people around.  that he pushes out the dates and pushes and never does anything else.  hmmm, sounds familiar, yes?  she said she has only run into one herself, and seen 2 others, but this fits what she has seen.

so, there is a possibility that we close on Friday.  I do not think it is going to happen.  dh and our Agent do not think it is going to happen.  But, if it does, I think I can be ready.  I have spent the last 2 weeks cleaning and organizing the house.  the basement has been emptied into 2 rooms at the front of the house; the upstairs has only 2 dressers and our beds.  it is our offices and my kitchen that will be a pain.

meanwhile, on Saturday, we are putting up our Christmas tree.  

Don't knock  Foreign money, like I said my wife works for one of the largest home builders and 75% of their business (in our area)is
foreigners with foreign money and they are all cash closings.

[Morning Sunshine]

yeah, no not knocking it by itself but with all the other weirdness, it is pretty fishy.  any ONE of those things would just be an oddity, but lots of them together is weird.

[Mr. Bill]

well, a few days after the original offer, there was an addendum. ...

One thing to remember, if things start getting too smelly and they send you another addendum: you aren't obligated to accept any change in the contract.  You can just say no, and if they don't meet the original terms, you're done (and you keep their earnest money).

My guess is that this is legit, and they're just used to doing things differently in their country.  But you won't know for sure until closing!

[LvsChant]

If they request another addendum, you would certainly be reasonable if you increased the amount of earnest money required. For a $500 deposit, they have very little risk. They would be less likely to walk away if their deposit was $5000 held in escrow by the broker's agent. In the meantime, you should also continue showing the home to other potential buyers, imo.

[reefmarker]

Oh yeah, what LvsChant said made me realize what made us dot every t and cross every i.  The house we were buying was not taken off the market just because we had a contract on it.  Our money was good and the mortgage seemed to be in good shape the entire time, but they really needed the house to move, so they made sure in the contract that it was clear the house was still available for showing.  They then ended up with another contract on it that would have sold the house to someone else if we could not close on time, and for more $.  This house was on the market over 6 months and the only 2 offers were one day apart (mine and one other, I was first)!

If they want another adendum (and you agree to it) I would make sure you add to the ernest money, put it in escrow, and state in writing that the house is going to continue to be shown up until closing. 

With the money in escrow you might want to check on what the legal requirements are where you are to get at the earnest money if they back out.  Some states say it is up to the escrow agent to determine who gets it and then they have to duke it out in court if there is a disagreement.  My agent said they basically would sit on disputed funds until one or the other got a judge to say turn it over, this makes the escrow agent the max amount of money (since they usually draw interest on the funds that they get to keep) and they don't have to deal with individuals demanding their money back.

[lovebug6133]

Do you have a status update?

[antsyaunt]

Do you have a status update?

I am interested in hearing what happened, too.  I hope it worked out well. 

[Morning Sunshine]

it drug and drug and drug.....

on the Thursday before Christmas: "I have the money, but no title companies are open tomorrow, so how about Tuesday?"
on Tuesday: "oh, sorry, we got distracted.  We have a bank statement that proves we have the money.  we'll get it to you"
on that Friday "here is the statement." which, btw was NOT a statement.  it was a paper from the "company" listing assets (that were in awfully round numbers)
and then, not another word from them.  Their agent, it sounds like, is getting as frustrated with them as we are.  she told us we can get the earnest money anytime we want.  hubby is willing to sit on it and wait for them, but I would rather get it now and if they are still interested later, they can pay another 500 (or 2k for the trouble they are  )

so the house is still for sale.  we had a few showings while they were dithering.  We had one yesterday, in fact.  It'll come.  The Lord told us to move and sell the house.  so either that means that the house will sell, or it means that there is a grander plan than I can see right now.  (and some of you might think I am justifying in my beliefs, but I do believe in a Creator who loves all of His children and guides us for our good, and sometimes for the good of others.  And I am willing to back up that faith with action)

[antsyaunt]

Thanks for the update.  It's a shame that it is dragging out so long.  But you have the perfect attitude!  It will work out. 

[LvsChant]

sorry to hear about that, MS. I was hoping it would all work out for you. If the same buyer comes back later, I'd definitely increase the pain for him backing out. (higher earnest money deposit and the option to keep on showing the house and accepting offers).

[Morning Sunshine]

10 years later.... the house is sold.  We close in 4 weeks from tomorrow.  And for more than we paid in purchase PLUS interest on the loan.

Now, still homeschooling 4 kids (but different ones - the oldest is gone and the youngest is we will be homeless in 4 weeks cuz we cannot find anything that we like.  And I feel we are in a bubble, so selling is good - buying not so much when we do not feel like we are in the place we want to stay forever.

just an update

[CarbideAndIron]

Wow, talk about an exercise in patience! Glad to hear.

[Morning Sunshine]

Wow, talk about an exercise in patience! Glad to hear.

LOL!  The house has been off the market since October of 2011; We relisted on August 26; we had an offer in 4 weeks.

[LvsChant]

I'm not surprised that it went more quickly now... I think people want to have their money invested in tangible assets with the expectation that we will soon be seeing the effects of all the money creation being done by the Fed.

I hope you find what you are looking for soon... but cash in hand and time to consider what you want isn't a bad place to be... We are finally in our new place after being sort of gypsies for a couple of years... between the travel between places, storing our stuff, etc., it wasn't totally fun, but we are much happier here.

Huge congratulations to you!