Boy did I PI$$ the banker off.

[Defender Chassis]

Background:

Trying to purchase a piece of property from a bankruptcy case that has two pole building on a heavily traveled road 2 miles from the interstate to relocate my shop/side business to. It went up for auction on the courthouse steps and I bid it up to $120,000. Before the gavel fell the bank bid $160,000 and took it back. This is pretty typical in these cases. Since I could not get a reasonable loan on the property for more than $125,000 I did not bid any further. I did however talk to the banker after the auction and made a deal to buy the property at $160,000 if he made the loan on my terms. He agreed and the journey began. The auction was June 23rd and he is just now ready to close.

How I pi$$ed the banker off:

In my deed search I revealed that there were restrictions on how the property was to be used. Although my plans do not violate the spirit of the restrictions, they do violate the letter and I am too conservative to chance a problem in the future. So, my response was to have the contract modified, before signing, to state that I could back out on the deal if there were any unacceptable restrictions on the deed. I then set out to have the restrictions removed. Basically a $125 document from my lawyer and the signature of two neighbors wipes them away. BTW, there are five restrictions, one was violated shortly after the deed was recorded with the restrictions in 1995 so it is moot, two I am not concerned about and two are worysome. The two I am worried about involve running an auto body or mechanic shop and storing unregisterd cars on the property. Not sure anyone would complain about storing $20,000+ race cars in the shop but you never know and it technically is an unregistered vehicle. Anyway on to the banker. His loan officer calls me yesterday and wants to set a date for the closing. I explain the situation with the restrictions and tell her I will let her know when the document is signed. He calls back a couple hours later and is furious that he turned others away to sell me this $250,000 property for $160,000 and how I never told him I was not going to buy it if the restrictions were not eliminated. Thing is I specifically remember discussing the situation on the day that he and I signed the contract. I guess I was just not explicit enough. problem is I really did not mean to mislead him but he so much as called me a liar and that is not really setting well with me.

Not sure why I am sharing. Any advice I guess?

 

[SuperSocket]

Banker calling you a liar? LOL... now that is a funny one


If it's not on paper it does not count... the banks would have spun that line to you if the tables were turned.

 

[bczygan]

Yes

....Your last interactions with him were on the phone. The phone is a cold way to communicate.
If your intention is to complete this deal with the least possible friction I think you know what has to be done. You need to get belly to belly with him. You need to shake his hand, take him by the arm, look him in the eye and genuinely reassure him of your intentions to complete this deal in as smooth a manner is as possible while protecting both your interests. Convince him that you consider him your partner in this transaction and that you would never do anything to hurt him. Banish your own fears and misgivings and stand in his shoes and empathize with his needs. Don't forget your own, but reassure him. Often at this stage in a contract, one party needs additional protection and that leaves the other party feeling vulnerable. It is correctable. Let him know that you felt vulnerable because of these things and you need his help in this matter. I've saved a number of contracts this way and made good relationships to boot. It is even better if you can meet in a neutral but safe location like lunch or some social place. I have even gone to a persons home to have this, what I call a Heart to Heart talk. Draw him out and get him to express his fears and doubts and worries. Console him and open your heart and allow him to see how much this means to you, and how much you want it, but for just a couple of minor details. You will make a friend and cement the deal and have him looking out for you, because you looked out for him. Take the time right now to set this up without any further delay or deterioration in the relationship.

 

[nehog]

...

how I never told him I was not going to buy it if the restrictions were not eliminated. Thing is I specifically remember discussing the situation on the day that he and I signed the contract. I guess I was just not explicit enough. problem is I really did not mean to mislead him but he so much as called me a liar and that is not really setting well with me.

Not sure why I am sharing. Any advice I guess?

1. Any contract for a real estate transaction must be in writing... So you have a written buy/sell agreement?

2. And you wanted to add oral restrictions to that written contract? Uh, no way that will stand up in any court.

So if you have a buy/sell written agreement, they may be able to hold you to it. If you have an oral agreement, it isn't binding on either party.

 

[Defender Chassis]

1. Any contract for a real estate transaction must be in writing... So you have a written buy/sell agreement?

2. And you wanted to add oral restrictions to that written contract? Uh, no way that will stand up in any court.

So if you have a buy/sell written agreement, they may be able to hold you to it. If you have an oral agreement, it isn't binding on either party.

I reviewed the contract before signing and asked for several revisions which were made. It is in the contract that I can back out if there are any restrictions that are objectionable to the buyer. How the bank pres was not aware of the changes I requested is beyond me. Sounds like he should be mad at himself for not reading a document he signed. It was the banks lawyer that made the contract and subsequent changes.

BTW, I have until Aug 31st to get the deal done. Also, typically the seller would be responsible for getting the restrictions issue resolved so I feel I have gone above and beyond to make this deal happen.

 

[ptschram]

1. Any contract for a real estate transaction must be in writing... So you have a written buy/sell agreement?

2. And you wanted to add oral restrictions to that written contract? Uh, no way that will stand up in any court.

So if you have a buy/sell written agreement, they may be able to hold you to it. If you have an oral agreement, it isn't binding on either party.

This. If it ain't wrote, it's rumor.

Any banker who accepted a verbal agreement for much of anything related to a loan shouldn't be a banker.

Yes, I've been burned in real estate transactions and once it was a banker-she's in prison now!

 

[Defender Chassis]

Holy **** guys, THERE ARE NO UNWRITTEN AGREEMENTS.

 

[ratdoggy]

It's not worth $250,000 if they'll take your offer of $160,000.

 

[ptschram]

Holy **** guys, THERE ARE NO UNWRITTEN AGREEMENTS.

It was written in the purchase agreement that you were going to take it upon yourself to resolve encumbrances and he's mad at YOU?

He should be thanking you for taking it upon yourself to take care of the issues that made it unsuitable for you to use.

I would have either walked away or told them to resolve those issues before we'd progress.

Sorry for any offense, it was unintended.

 

[Defender Chassis]

It's not worth $250,000 if they'll take your offer of $160,000.

Thats what I say. It was only worth $120,000 on June 23rd. Its only worth $160,000 now because I am willing to sign on the note. I call BS on him having turned others away. Where were they when I was bidding on the courthouse steps?

 

[Defender Chassis]

It was written in the purchase agreement that you were going to take it upon yourself to resolve encumbrances and he's mad at YOU?

He should be thanking you for taking it upon yourself to take care of the issues that made it unsuitable for you to use.

I would have either walked away or told them to resolve those issues before we'd progress.

Sorry for any offense, it was unintended.

Sorry for the confusion but no, it is not in the contract that I will resolve the issues. It is in the contract that if there are any unacceptable restrictions that the owner has so many days to get them resolved. I do not have faith that the bank could get the restrictions released so I took it upon myself to start the process.

One neighbor is a gearhead and is chomping at the bit to get my shop moved. I am 99.9% sure he will sign the release. The other is an old MX racer and is harder to read. I put his chance at signing at about 50%.

BTW, the other two restrictions are no mobile homes and no farm animals.

 

[ptschram]

Sorry for the confusion but no, it is not in the contract that I will resolve the issues. It is in the contract that if there are any unacceptable restrictions that the owner has so many days to get them resolved. I do not have faith that the bank could get the restrictions released so I took it upon myself to start the process.

He should be thanking you as you're increasing the value of the real estate.

Don't record those documents until you have the loan closed as the value will instantly increase when you do.

Until they are recorded, the documents and the release of encumbrances belong to you, not the bank.

I'm in the middle of a nasty fight involving an unrecorded, undocumented easement. It's gonna get ugly before it gets better, I spent much of the morning on the phone with my attorney friend, tonight, I get to draft letters for his review before I drop the bombs.

 

[Crizzle]

He should be thanking you as you're increasing the value of the real estate.

Don't record those documents until you have the loan closed as the value will instantly increase when you do.

Until they are recorded, the documents and the release of encumbrances belong to you, not the bank.

I'm in the middle of a nasty fight involving an unrecorded, undocumented easement. It's gonna get ugly before it gets better, I spent much of the morning on the phone with my attorney friend, tonight, I get to draft letters for his review before I drop the bombs.

I was wondering the other day where you stood on that, I remember the thread.

 

[Wastedwagesracing]

I'm learning the banks are just hard and unreasonable to deal with. I'm in the middle of trying to purchase an adjoin foreclosed property. Part of my offer was the bank would provide an environmental report covering the property. Banks position is they will do that 5 days after the closing of the property. Three times in my mind I have told them to piss off. But we really need that property for future expansion.

 

[ptschram]

I'm learning the banks are just hard and unreasonable to deal with. I'm in the middle of trying to purchase an adjoin foreclosed property. Part of my offer was the bank would provide an environmental report covering the property. Banks position is they will do that 5 days after the closing of the property. Three times in my mind I I have told them to piss off. But we really need that property for future expansion.

WTF? Any liability for environmental concerns lies with them, or previous owner. What recourse would you have after closing?

Most states require the assessment be done before transfer can take place.

Does your state have a"responsible property transfer law"?

 

[78Bird]

I reviewed the contract before signing and asked for several revisions which were made. It is in the contract that I can back out if there are any restrictions that are objectionable...

Right there guys, he got it IN the written agreement. The banker is being a blowhard, but DC is totally in the right. It's not his problem that banker man didn't read up on the new revisions.

Indeed the bank's lucky he's rectifying it on his own and not making them do it.

Stand firm

 

[Wastedwagesracing]

WTF? Any liability for environmental concerns lies with them, or previous owner. What recourse would you have after closing?

Most states require the assessment be done before transfer can take place.

Does your state have a"responsible property transfer law"?

Not sure they have the report but will not give it to me until after the closing. It's just been me and the small town Bank President. To be honest I don't thing either one of knows enough about it to know whats right and whats wrong. I'm just going to turn it over to our attorney and tell him to get the damn thing bought. I thought it would be an easy deal to pull together but guess not.

 

[theoldwizard1]

If it's not on paper it does not count...

My variation of that is, "If it is not in writing it hasn't been said !"

Quick highjack.

My son had roofing job done at his place a couple of weeks ago and I was the negotiator and on site home owner representative. The roofing company had agreed to do some extra work a long with a bunch of "little things". I wrote them all down in an addendum to the contract and they signed it.

When the crew got there, I found the foreman and gave him a copy of the addendum and asked if he was prepared to fulfill all of it. He took a couple minutes to read it and then started barking order. Do we have this, check that, remember to ...

It was great ! And everyone was happy at the end of the day.

 

[Big Top GT]

I reviewed the contract before signing and asked for several revisions which were made. It is in the contract that I can back out if there are any restrictions that are objectionable to the buyer. How the bank pres was not aware of the changes I requested is beyond me. Sounds like he should be mad at himself for not reading a document he signed. It was the banks lawyer that made the contract and subsequent changes.

BTW, I have until Aug 31st to get the deal done. Also, typically the seller would be responsible for getting the restrictions issue resolved so I feel I have gone above and beyond to make this deal happen.

If you get it worked out, I'd immediately relist it for $250k.

If the buyers were real at $250,000, they'll find you.

I'll take a quick $90,000 flip all day long.

 

[Defender Chassis]

If you get it worked out, I'd immediately relist it for $250k.

If the buyers were real at $250,000, they'll find you.

I'll take a quick $90,000 flip all day long.

I hear ya but I think I will need about four trash trucks and some busted pipe repairs first. Did I mention the deal is as-is? The guy/business that went bankrupt did so because the guy was getting a divorce and he just walked away. No winterizing was done and I have located at least one section of copper pipe that appears to have been frozen and pushed the joints apart.

 

[ptschram]

Not sure they have the report but will not give it to me until after the closing. It's just been me and the small town Bank President. To be honest I don't thing either one of knows enough about it to know whats right and whats wrong. I'm just going to turn it over to our attorney and tell him to get the damn thing bought. I thought it would be an easy deal to pull together but guess not.

LOL-that's not the way it works around here as you'd potentially be buying a piece of contaminated property an the bank had prior knowledge and concealed a material fact affecting the value of said property.

Years ago, part of my job was doing preliminary site assessments before transfer. I've been out of it for ten years and still get called upon to review what I found almost 20 years ago-in two states no less.

Make sure you've covered your *** if there are any possibilities the real estate is contaminated.

 

[Frank The Plumber]

If he could have actually sold it for $250,000 it would be gone. Go over his head and inform his superior that you are insulted and want a new banker, maybe they will snip his tie for him.

 

[Carl B]

I may have missed it - but is there a house on the property or just two Pole Building?
Also how much property is included?

Several people here mention "Pole Building" - but then when I see pictures of the building they are not really what we Ohio Farmers refered to as "Pole Buildings".

So are these building with dirt floors, which have their roofs held UP by actual wood poles stuck directly in the ground? Or are these buildings built on a poored foundation with walls etc?

thanks
Carl B.

 

[c_mccann]

that guy is a lazy *****. It is only worth what it is in contract for. If it was worth $250, he ould have offered it to an insider for cash and been done with it- I see them across my desk all day long.

 

[Defender Chassis]

I may have missed it - but is there a house on the property or just two Pole Building?
Also how much property is included?

Several people here mention "Pole Building" - but then when I see pictures of the building they are not really what we Ohio Farmers refered to as "Pole Buildings".

So are these building with dirt floors, which have their roofs held UP by actual wood poles stuck directly in the ground? Or are these buildings built on a poored foundation with walls etc?

thanks
Carl B.

They are pole buildings with garage style role up doors and concrete floors. One building has a small apartment and the other has an office/showroom. The previous owner sold/did closet renovations.

 

[Carl B]

It's not worth $250,000 if they'll take your offer of $160,000.

I understand the thought process - but in this case I don't necessarily agree 100%.

Words like value or worth can have different definitions to different individuals in different situations.

The Bank can have all manor of incetives for selling quicky after taking the property back. All of which may have a much higher priority for them - than holding the property in order to get top dollar out of it.

Find the right buyer - that needs that situation {two buildings outside of town etc} - and it could easily be worth $250,000.00 to him. Banks are flooded with repo's - and lacking a large buyer base -so the try to reduce their risk or down side - and dump the property ASAP.

No question that at $160K - it would seem to be a screeming good deal.

FWIW,
Carl B.

 

[Defender Chassis]

.955 acres

 

[Carl B]

As long as it has high-speed Internet - I'd take that, live there and totally enjoy it.

An acre of land, just outside town - with those two buildings - - screaming great deal - and a far better place than Wall Street or Banks - to have your capital in the comming years.

thanks for the pictures,
Carl B.

 

[pysen78]

Be glad you're not living in Sweden! Here any unknown contamination issues with land is up to the current owner to resolve, and is not allowed to linger, by law.

On the news a while back: Some poor guy bought a house. Previous owner had stored weedkiller by the barrel under the house. Barrels rusted out years ago and the chemicals were already in the ground (weed killer called "Hormoslyr" basically the same compound as "agent orange") Current owner has the responsibility to sanitize the property and can't choose not to. Guess he went bakrupt.

Anyways, On topic: I second what bczygan said. Most conflicts like this comes from actual personal feelings of insecurity. Though oftentimes irrational, the best way to counteract is compassion, rather than a "gloves off" attitude. I've saved a number of business partners this way, and lost few, before I learned how to do it. Of course, not everybody can be figured out.

First step is to realize the banker acts the way he does, because he feels he has to. Not because he's fundamentally a mean SOB. Find out the likely reasons for his action and try to counteract the reasons. If it's fear of being ripped off, reassure him. If his woes are based on something solid like this small town banks own liquidity or something, then reason about that. If you get level with him and he gets level with you, there's no real reason to think this deal can't be worked out. The 250000 vs. 160000 issue shouldn't be a real problem unless he personally gets a percentage or something. I don't know the ins and outs of american banks.

Good luck!

 

[macdabs]

Maybe I am missing something . If you value the property at 160 k as a deal some one else will also. You may be doing all the work to eliminate the restrictions and the banker you pissed off could be using your offer to get the next guy a second chance to purchase the property. The bank me even offer it to someone else for less to move it and piss you off. Remember they hold the property not you. Or you may even need a business loan from them some day. Unless you a paying cash then you can move on.

 

[Defender Chassis]

Maybe I am missing something . If you value the property at 160 k as a deal some one else will also.

Thats possible but not guaranteed. Its only worth what someone will pay for it. On June 23rd on the courthouse steps it was worth $120,000. Until August 31st its worth $160,000 assuming I can get the neighbors to sign. Is it possible someone may pay $250,000? Yes! Is it possible the banker has other interest at $160,000? Yes! Would I bet on it? No!

I have a contract to buy the property. The bank can not sell it to anyone else before August 31st without violating the contract. As was stated by another board member, I will hold the paperwork to remove the restrictions and it (the paperwork) will belong to me. That is partly why I am taking the initiative to do the legwork on getting the restrictions removed on my own. If the bank tries to sell it out from under me then they will not benefit from my work to remove the restrictions.

 

[nehog]

Be glad you're not living in Sweden! Here any unknown contamination issues with land is up to the current owner to resolve, and is not allowed to linger, by law.
...

In the US this is becoming the rule too... It was realized that the difficulities and moral issues of going after past owners who often didn't have knowledge or were not party to the pollution was just not a viable or reasonable thing to do.

Now liability is limited to the current owner, a seller if they had knowledge (and did not disclose such knowledge), and the original polluter (assuming they still exist, which is often a dead end!)

This is one of the reasons you don't buy property that was used commercially, especially for businesses that used solvents and such (such as old dry-cleaning establishments, and manufacturing facilities.) In New England, sites that were old leather tanning plants are particularly problematic--at the time the businesses didn't know the true hazards of what they were doing, and those chemicals lurk in the soil and ground waters for many, many years. Ouch!

 

[green.bubbly]

Just out of curiosity, how would you have dealt with the restrictions if you would have won the auction?

You want to make a deal with the bank that the transaction rides on removing some of the restrictions but if you would have won the auction, you would still had have to deal with the restrictions.

Guess I am confused as to why you would have accepted the conditions at 120k but not at 160k?

 

[Defender Chassis]

Just out of curiosity, how would you have dealt with the restrictions if you would have won the auction?

You want to make a deal with the bank that the transaction rides on removing some of the restrictions but if you would have won the auction, you would still had have to deal with the restrictions.

Guess I am confused as to why you would have accepted the conditions at 120k but not at 160k?

Interesting question. Fact is, I was not aware of the restrictions at the time of the auction. I guess it depends on whether I would have found them before or after I put the deposit down. I would buy at $120,000 with restrictions for the investment though. May not keep for my business as it partially relates to automobiles. The funny part of this deal is that the neighbors did not know that there were restrictions on this property and if I would not have told them, they still would not have known.

 

[EVOSTi]

$160K buys a lot in America!

 

[pj_rage]

$160K buys a lot in America!

Definitely can, but depends where you are! Real estate prices vary A LOT depending on location, as I'm sure is the case in Australia as well.

In any case, that's a great buy at $160k. I hope you get the restcrictions removed.

 

[NUTTSGT]

$160K buys a lot in America!

Sometimes it does, sometimes it doesn't buy squat. It depends on the location and market. One home here might sell for $160K and in a big city in another state might sell for $480, easily.

There's some killer deals out there, just not everywhere. A local facilty went up for sale after the manufacturer was sold and moved out of state. 30+ acres, numberous bldgs, including offices. A place big enough to build boats (BAJA to be exact) and was listed at 1.2 million I believe. Some how, a deal was worked out, for an easy and cool 180K. There were some serious jaws dropping over that deal.

Sorry for the hijack.

Bczygan's has spoken some reassuring words. I'd offer to take the banker out to lunch and dicuss some details of the deal. Let him know, you want the property but need your ducks in a row first. Yet, on the other hand, advise him you can walk after 8/31, letting him sell it to his "interested others."

 

[SuperSocket]

Sometimes it does, sometimes it doesn't buy squat. It depends on the location and market. One home here might sell for $160K and in a big city in another state might sell for $480, easily.

There's some killer deals out there, just not everywhere. A local facilty went up for sale after the manufacturer was sold and moved out of state. 30+ acres, numberous bldgs, including offices. A place big enough to build boats (BAJA to be exact) and was listed at 1.2 million I believe. Some how, a deal was worked out, for an easy and cool 180K. There were some serious jaws dropping over that deal.

Sorry for the hijack.

Bczygan's has spoken some reassuring words. I'd offer to take the banker out to lunch and dicuss some details of the deal. Let him know, you want the property but need your ducks in a row first. Yet, on the other hand, advise him you can walk after 8/31, letting him sell it to his "interested others."

Yep.


I can buy about ~80 acres up north and a shop larger than that brand new for the same price as the OP is paying.


OP is getting less than an acre.


Prices vary a ton on the areas. Now around where I live, I would not even be able to get a quarter acre for that price... just barren land too.

 

[fergus]

Hey dude,

Don't sweat it. This is typical banker/real estate BS. Its just a pressure sale tactic. He figures you don't know any better...that you have to do what he says. But it appears that you do know better. Do you know how many times I've been yelled at by loan brokers and realtors? He probably just wants the loan closed this month so he can get some bonus or extra commission or whatever. Keep up the good work with negotiating on your own terms...including the terms of the loan. You do know that everything is negotiable when it comes to a loan right?

 

[Defender Chassis]

Its all a moot point now. I finally got in touch with the neighbor who was on the fence with respect to signing the release and he refuses to sign. Syas he does not care what I do there but he will not sign. Unfortunately that takes me out of the ballgame. Gonna cost me about $200 to learn this lesson but better that than $1200/month payments for 20 years for property I cant use.

I do appreciate the advice though. A lot of good points made above.