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#466299 - 12/10/19 02:26 AM Need broker opinion and help here
Semi Offline
Junior Member

Registered: 12/10/19
Posts: 6
Loc: Wisconsin
Really enjoy reading and learning on this forum. It's great there is a place dedicated to real estate.

That being said I need opinions.

We recently placed an offer on a second home. After the first counter offer the sellers offered personal property into a counter offer which we accepted. So we have accepted offer and all paperwork is in order and we cleared for closing with our lender. All this being said we had to draft a simple statement to our bank saying we see the value of the personal property as zero because lenders obviously don't want that in the loan. Everybody knows that. We didn't ask the sellers to sign anything as our bank accepted this form with just us (the buyers) now, the seller said he would sign this if we removed the finance contingency but then declined after we removed contingency (they lied to get us to release finance contingency). Since he and his broker designed this offer with personal property they want to throw a huge wrench into this deal because he doesn't want to pay capital gains on the 10k worth of personal property. Please know we didn't request this counter they came to us and we accepted it. He is now threatening to throw this form back at us which may cause our lender to hold the loan. The same form stating personal property is included at a value that he is determining.

We both have attorneys now but am looking for opinions. We have a legal and binding accepted offer. My broker assures me we are in the right and so does my attorney.

Seller is saying because my bank made us do this form we need to pay for his attorney so he can get legal review on what to do. Anyone ever experience this? He and his broker caused this by putting it in the offer to begin with. Any thoughts from the pro's here? As I see it his broker screwed up and he accepted that. Now he is not happy and may want to cause issues. What do we do?

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#466300 - 12/10/19 12:13 PM Re: Need broker opinion and help here [Re: Semi]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2415
Loc: Outer Banks
We sell completely furnished second homes all the time. What we would do is rewrite the contract with no mention of the personal property in the contract.

Then on the side and not mentioned in the contract everybody signs a Seperate Bill of Sale for $1.00 that transfers all the personal property to the buyer at the closing of the house.

$10k for used furniture is way too much. Used furniture sells for pennies on the dollar if you can sell it. If you were not taking the furnishings, the seller would most likely have to pay to have it removed.
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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#466301 - 12/10/19 01:41 PM Re: Need broker opinion and help here [Re: Bigtoe]
Semi Offline
Junior Member

Registered: 12/10/19
Posts: 6
Loc: Wisconsin
I agree, they didn't want to move everything. But his issue is paying capital gains on it. He doesn't want to pay for cap gain on the full sale price. Believes the sale price should be 10k less and we should just pay him cash for the personal items. But we are not obligated to do so. We have a binding contract at this point and are 9 days from our closing.

If we did the $1 thing as you mentioned, his problem is staying paying cap gains on the 400k instead of 390k.

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#466302 - 12/10/19 07:55 PM Re: Need broker opinion and help here [Re: Semi]
Long Walk Online   content
Member

Registered: 06/27/08
Posts: 424
Loc: New Hampshire
Originally Posted By: Semi
If we did the $1 thing as you mentioned, his problem is staying paying cap gains on the 400k instead of 390k.
It sounds like the seller got some "advice" about capital gain and has a largely inexperienced agent.

Unless there is more to the story, the capital gain argument sounds off to me. Is this property occupied by the seller? It might help if you told us the sale price and how long the seller has owned it. Is it a condo? Where did the estimate of $400K come from that capital gain would be based on?

I have dealt enough with capital gain tax to know that it is not terribly common for residential sellers to know their depreciated basis while the negotiations are going on.

But, if the seller is that concerned with capital gain, why isn't s/he doing a 1031?

Based on what you have shared, I think you need a CPA to talk to everybody rather than a lawyer.

Last question: what did your agent's broker-in-charge (or whatever they call the supervising broker in your state) say when this problem was brought to him/her?

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#466303 - 12/10/19 09:28 PM Re: Need broker opinion and help here [Re: Long Walk]
Semi Offline
Junior Member

Registered: 12/10/19
Posts: 6
Loc: Wisconsin
All good questions. Sale price is 400k. They offered that price to us in a counter offer and included an addendum that listed a bunch of personal property such as furniture etc.

We agreed to this counter offer and accepted it.

To satisfy our lender we had to do a wb41 stating that we don't consider personal property to have any value. Originally the bank wanted both parties to sign that. Seller said he would if we released finance contingency. We did and he still refused to sign. We have emails from their broker stating this.

Since they refuse to sign our lender accepted this form with just our signatures stating "we" see no value in the personal property just to satisfy underwriting.

Now he is tossing us a wb41 telling us to sign it stating the value of personal property is 10k. This will cause the lender to stop the loan. I verified that this morning. I have had attorneys look at the offer docs and both say everything is in order and done to satisfaction.

The whole problem he has is as follows, his broker and him should have never put the personal property in the counter offer. That was their mistake. He is trying to blame this on my lender telling me this is all our fault. He only wants to pay capital gains on 390,000 and not 400,000.

Addendum A lists all the personal property in the closing docs. Our attorney said he only has to list 390k for gains since addendum A is in the closing statement. That he should have no issue with his cpa since it's listed in the offer.

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#466304 - 12/10/19 09:34 PM Re: Need broker opinion and help here [Re: Semi]
Semi Offline
Junior Member

Registered: 12/10/19
Posts: 6
Loc: Wisconsin
This is a secondary property. Not their primary residence.

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#466305 - 12/11/19 01:34 AM Re: Need broker opinion and help here [Re: Semi]
Semi Offline
Junior Member

Registered: 12/10/19
Posts: 6
Loc: Wisconsin
We have a feeling they are trying to ruin this to take a recent secondary offered that is higher.

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#466306 - 12/11/19 01:00 PM Re: Need broker opinion and help here [Re: Semi]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2415
Loc: Outer Banks
There is no way to fix these problems it they have a higher backup offer. Take as is or walk away and see if they are bluffing about the 2nd offer.
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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#466307 - 12/11/19 07:05 PM Re: Need broker opinion and help here [Re: Bigtoe]
Semi Offline
Junior Member

Registered: 12/10/19
Posts: 6
Loc: Wisconsin
so our accepted offer, our legal contract means nothing?

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#466308 - 12/11/19 07:48 PM Re: Need broker opinion and help here [Re: Semi]
Long Walk Online   content
Member

Registered: 06/27/08
Posts: 424
Loc: New Hampshire
Originally Posted By: Semi
so our accepted offer, our legal contract means nothing?
Probably best to bring these questions to your attorney. Nobody replying in this thread is an attorney and you said you have one.

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#466311 - 12/12/19 12:28 PM Re: Need broker opinion and help here [Re: Semi]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2415
Loc: Outer Banks
I never said or implied any such thing. I said take it as per your contract or walk away. If you walk away, make sure you let the seller take the action ending the deal so you get your deposit back. If you go this route do so under the advice of your attorney and not your agent.

I said this because you said the seller has a better offer he wants to take. With a better offer in play, you have no chance of renegotiating your current contract unless you match the better offer.

Of course, there is always the possibility that there is no backup offer.

Every agent everywhere knows that lenders don't want to see personal property in a contract. The fact that both agents were ok with adding a whole house full of furniture to the contract shows a true lack of understanding by all involved.



Edited by Bigtoe (12/12/19 12:50 PM)
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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