• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Paying extra 20K just for the right to buy a property??

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

diamond20

Member
What is the name of your state (only U.S. law)? PA

My husband and I wanted to make an offer on this condo that was on short sale. Our realter contacted the real estate company who was selling the condo and told us they want to downpayment of 20K no less. We were originally planning on putting 15 K down but figured we could borrow 5K from someone sinc ethe condo was worth it. We agreed but then I thought it was strange since 20K was more than 10% and less than 20% and downpayment usualle 3,5, 10 or 20%, not somwhere in the middle. Our agent said she is just telling me what the selling agent has told her. So she got me on a three-way call with the selling agent and here is what I found out - the condo was on the market for a long time and real estate selling it lost money somehow ( I am not sure exactly how), for whatever resason they were not paid and they want to be reimbursed - hence the 20K. The bank wanted 150K and the real estate agency put up the condo for 170K. In addition to this 20K we were supposed to pay at least 5% downpayment of the 150K price and settlement cost. So none of the 20K were going towards our mortgage. It was just a payment for the right to actually buy the property
Of course we got rid of the realter on the spot and she kept on calling us saying that she apologizes and that she is there to represent us.

Represent us??? Thank you, but no.

My question is - is it even legal to do that? and also wasn't it our realter's responsibility to find out the details? I mean what if we went through with it and at the end found out that 20K were waisted?
 


HomeGuru

Senior Member
What is the name of your state (only U.S. law)? PA

My husband and I wanted to make an offer on this condo that was on short sale. Our realter contacted the real estate company who was selling the condo and told us they want to downpayment of 20K no less. We were originally planning on putting 15 K down but figured we could borrow 5K from someone sinc ethe condo was worth it. We agreed but then I thought it was strange since 20K was more than 10% and less than 20% and downpayment usualle 3,5, 10 or 20%, not somwhere in the middle. Our agent said she is just telling me what the selling agent has told her. So she got me on a three-way call with the selling agent and here is what I found out - the condo was on the market for a long time and real estate selling it lost money somehow ( I am not sure exactly how), for whatever resason they were not paid and they want to be reimbursed - hence the 20K. The bank wanted 150K and the real estate agency put up the condo for 170K. In addition to this 20K we were supposed to pay at least 5% downpayment of the 150K price and settlement cost. So none of the 20K were going towards our mortgage. It was just a payment for the right to actually buy the property
Of course we got rid of the realter on the spot and she kept on calling us saying that she apologizes and that she is there to represent us.

Represent us??? Thank you, but no.

My question is - is it even legal to do that? and also wasn't it our realter's responsibility to find out the details? I mean what if we went through with it and at the end found out that 20K were waisted?

**A: confusing but I think you are saying that the $20K is for an option to buy the property and has nothing to do with the downpayment on the purchase price correct? If true, never pay option money for a short sale.
 

diamond20

Member
You are exactly right. So this is called "option money"? And is legal?

Shouldn't realter have warned us it has nothing to do with downpayment?
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
Top