We wrote our offer on a Richmond Annex property on January 29th. A week later we were in contract. By the end of the following week we had completed all our inspections and based upon these inspections requested a price reduction to help cover the cost of repairs needed.
The listing agent advised us that this request would not be accepted and a week later she was proven right. My clients were not willing to proceed based upon the initial price and the inspections. So we sent in a request for a price reduction of a lesser amount. A week later this was accepted and we're ready to move forward. By this time we're a month into the negotiations. We got our appraisal done and everything is flowing the way it should. All the bumpy spots are now out of the way, or so we thought.
On Monday, March 14th, we signed loan docs, had a glass of champagne and looked forward to closing. Final loan conditions were met and buyers wired remainder of downpayment to Escrow holder on Thursday, March 16. Now we're done. All we have to do is sit back and wait for the loan to fund and the deed to be recorded. Not so fast.
Thursday evening I received a phone call from the listing agent. "Hello Bill. I have some bad news for you..." She want on to explain that she didn't have the details but needed to inform me that the bank was cancelling the contract and that the appropriate docs would be drawn up and sent to us on Friday. It seems that the bank believes that it may not be the legal owner of the property! It may have not followed the correct procedures for foreclosure and therefore cannot legally sell the house and needs foreclose all over again!
One might wonder what the bank would do if they were a day later and the property had closed. Or for that matter what my clients would have done, if the bank sold them a property that wasn't theirs to sell. I wonder how many of these have already been sold.
My clients are now almost two months into this transaction, emotionally tied in to it, financially have spent on inspections, appraisals, well over $1500.
I'm feeling an emotional charge about this one. My clients are great. They've never bought a home before and shouldn't be treated this way.
Do my clients have a recourse? Unlikely. The Bank's addendum to the purchase contract makes it very clear that there is no recourse.
One wonders if the banks (yes I'm lumping them all together) have any kind of conscience at all. First they create a crisis in the housing market (See the movie Inside Job, or listen to the director tonight on KQED 8PM or 3/19 at 2PM--Commonwealth Club), then they foreclose, then in the rush to make a buck don't even do it correctly. I wonder if any of us will even get a letter of apology. I'm not expecting it.
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