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Help! Home buying situation/need to pull out!?!

Home Mortgages and Home Buying Help! Home buying situation/need to pull out!?!

  • CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2806
    Joined: 01/03/2017

    I don’t understand why people think the boss did him a solid or that he owes his boss anything. His boss, if anything, sounds like he kept things from the group or the OP. Being 3 months away from bankruptcy and not saying anything is a dick move. Screw him. You don’t owe him or anyone anything except you and your wife (and family). Protect yourself, get out of that job, and use this information if possible to back the heck out of the loan.

    Unless the “boss” is the only one with all the financial information in this group it’s silly to think that others don’t know and aren’t making their own exit plans.

    Click to expand…

    I don’t know the dynamics of the OP’s group but it sounds like not everyone is privy to the books. It’s a tough line to try to walk between trying to save the group and telling the group about a possible bankruptcy which will guarantee that everyone will be looking to leave and that will 100% seal the fate for the group.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #193186 Reply
    Liked by q-school
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3500
    Joined: 01/14/2017
    It’s a tough line to try to walk between trying to save the group and telling the group about a possible bankruptcy

    Click to expand…

    I agree that I can’t possibly know the specifics of the situation, but this is the owner’s problem.  The OP has information and they need to act on it to the fullest extent that it helps his family.

    I think this situation is a bit far-fetched:

    “For all you know, the loan officer’s brother is a vendor to the medical group and is owed money…now he finds out about the impending bankruptcy and tries to get paid, first. Then someone else hears, etc. Then all the other docs start quitting because they don’t want to be last, etc.”

    This isn’t the time to care about that (unlikely) stuff.  I don’t see how telling the lender possibly hurts the OP’s situation.  If anything it saves them from the loan contingency.  The title company is holding the earnest money.  Best case is that you can get out of this and the seller is told the situation and doesn’t take this to court.  But worst case scenario is that they go after the money but you also show a willingness to fight – that ties the funds up for a long time.  But I don’t think you can go to court and fight this without something in writing.  Maybe don’t flat out ask your boss but perhaps email him a summary statement of his disclosure to you and ask him if he’d be willing to write a formal statement to your lender to this effect.  If he replies acknowledging the facts but refuses to write something up then at least you have something in writing.  Alternatively, ask to see the books – getting a CPA to look at this and declare that they are likely headed towards bankruptcy will probably cost far less than the earnest money and at least gives you some hard backing to provide to the lender.  Sounds like this is a time crunch, so highly unlikely that occurs before Wednesday.

    Agreed that this really stinks and sorry it’s happening.

    #193199 Reply
    Liked by CordMcNally
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018

    DO NOT mention anything to the real estate agent ever! The agent (both listing and selling) have a fiduciary duty to the seller! Anything you say can and will be used against you.

    For the size you indicated, go see a great real estate attorney that you would hire in defense. For 10’s of thousands, you may need them. A consultation and a much smaller check are you hope. Almost any financing contract requires notification of material adverse events. You may have a legal obligation to the vendor.

    Hopefully a note worded correctly will suffice:
    I have become aware of a material adverse event that will prevent me from fulfilling my financial obligations under the loan terms. I am obligated to advise you … and will not be proceeding further…..” How and what you say will depend upon your state laws. You need legal advice. Financially, your worst case the earnest money is gone.
    Better than digging yourself out. Your new real estate attorney needs to guide you through this.

    #193201 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1807
    Joined: 02/11/2019

    Who is your attorney? That’s who I would be going to at this point. Did he sign off on the contract yet. If not I am sure something can be found wrong with it.
    Did you a already sign off on the inspection. Even a newer home can have a bunch of nitpicky stuff wrong with it. Any hoa or shared rights to the property. If you have not reviewed those yet you can object to anything in that.

    “Never let your sense of morals prevent you from doing what is right.”

    #193207 Reply
    Avatar adventure 
    Participant
    Status: Spouse
    Posts: 1183
    Joined: 10/24/2016

    1. If you quit your job (or get fired?!) today… no way they give you a loan. I mean, if you have some cash to hold you over u til a new gig, you might be best served to leave today, get the $ back, and find a new job.

    2. Do you have enough chops ( and savings!!)?? To just buy it, find a new job, and still make the payments for 6+ months?

    3. Re-read your lending. If you don’t get the interest rate you want… if bet you could get out of it. Feel free to post here, or find a lawyer to help.

    4. Ask your lender to pull it? … I know if I told them I was getting canned they’d cancel the loan ASAP.

    5. It isn’t 60%, it’s 100%. You don’t go from 1% to 60% and then back to 1%. GTHO!

    6. Just my first thoughts. Do you have a mortgage friend who can help? Maybe post on bigger Pockets on how to get out??

    #193211 Reply
    Liked by ENT Doc, Hank
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2483
    Joined: 05/01/2017

    Who is your attorney? That’s who I would be going to at this point. Did he sign off on the contract yet. If not I am sure something can be found wrong with it.
    Did you a already sign off on the inspection. Even a newer home can have a bunch of nitpicky stuff wrong with it. Any hoa or shared rights to the property. If you have not reviewed those yet you can object to anything in that.

    Click to expand…

    Trying to decide how I feel about this. It might leave the seller with the impression/worry that there was something wrong with their place when in reality the entire issue is on the buyer’s end.

    I think maximal disclosure here — even if that is something really generic like “unforeseen circumstances with financing have made this impossible” is ethically preferable to deceit no matter how small.

    #193235 Reply
    Liked by ENT Doc
    Avatar fasteddie911 
    Participant
    Status: Physician
    Posts: 304
    Joined: 05/31/2016

    Not to derail this too much, but exactly happens in bankruptcy?  Will OP lose their job or will it just be additional job uncertainty?

    #193250 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018

    @mpmd,
    “Trying to decide how I feel about this. It might leave the seller with the impression/worry that there was something wrong with their place when in reality the entire issue is on the buyer’s end.”

    Please don’t be offended, I am really at loss. If one is facing serious serious financial consequences, in what way is it ethical to value the other parties “worry” over your well being?

    Terminating the contract one way or the other is a negotiation, although one that was unanticipated. Honesty and aggressive negotiation aren’t really deceitful or unethical. Full disclosure will often hurt you.

    The attorney may say, “Unsatisfactory, withdrawn.”
    Anything else is a basis for challenge up to and including specific performance and reimbursement of their legal fees. It is unfortunate not deceitful or unethical.

    #193252 Reply
    Liked by Lordosis
    Avatar octopus85 
    Participant
    Status: Resident
    Posts: 229
    Joined: 08/13/2017

    @mpmd,
    “Trying to decide how I feel about this. It might leave the seller with the impression/worry that there was something wrong with their place when in reality the entire issue is on the buyer’s end.”

    Please don’t be offended, I am really at loss. If one is facing serious serious financial consequences, in what way is it ethical to value the other parties “worry” over your well being?

    Terminating the contract one way or the other is a negotiation, although one that was unanticipated. Honesty and aggressive negotiation aren’t really deceitful or unethical. Full disclosure will often hurt you.

    The attorney may say, “Unsatisfactory, withdrawn.”
    Anything else is a basis for challenge up to and including specific performance and reimbursement of their legal fees. It is unfortunate not deceitful or unethical.

    Click to expand…

    This. I’m heartened to see how many of you seem to feel obligated to do the “right thing”, be honest/forthright, etc. But it’s not in the OP’s best interests to do so. The contract is a negotiation – the seller could have asked for the inspection contingency to have required disclosure of specific objections the buyer has, but they didn’t. Do what the contract says, nothing more.

    #193256 Reply
    Liked by Zaphod, adventure
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018

    @fasteddie,
    As a partner, you will be “last in line”. Obviously depends on the bankruptcy situation. It can be a lot more serious than losing a job. You as an owner gets paid last. Any unpaid earnings or expenses or potentially cash balance plans are at risk as well. You might even run into clawbacks as well. For example, incentive payments this year for 2018 incentives. Finding a new job only keeps your income stream going. You may be the recipient of preferential payments in anticipation of bankruptcy. Bankruptcy itself is expensive. The physician partners will to some extent be working for free.
    The only other scenario is a negotiation with creditors to settle for reduced payments or schedules. Normally, partners would be sacrificing something too.

    Four Types of Business Bankruptcy

    #193257 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2483
    Joined: 05/01/2017

    @mpmd,
    “Trying to decide how I feel about this. It might leave the seller with the impression/worry that there was something wrong with their place when in reality the entire issue is on the buyer’s end.”

    Please don’t be offended, I am really at loss. If one is facing serious serious financial consequences, in what way is it ethical to value the other parties “worry” over your well being?

    Terminating the contract one way or the other is a negotiation, although one that was unanticipated. Honesty and aggressive negotiation aren’t really deceitful or unethical. Full disclosure will often hurt you.

    The attorney may say, “Unsatisfactory, withdrawn.”
    Anything else is a basis for challenge up to and including specific performance and reimbursement of their legal fees. It is unfortunate not deceitful or unethical.

    Click to expand…

    I agree with you that “unsatsifactory, withdrawn” is fine.

    What I was quibbling with was what I read, possibly incorrectly, as a suggestion to indicate that issues came up on the inspection  when in fact nothing major did. Again if I read that incorrectly I apologize/stand down etc.

    I also think everyone could consider this from the seller’s perspective and consider if you were them if you would go after some of the earnest money. I would.

    #193258 Reply
    Liked by StateOfMyHead, Tim
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1312
    Joined: 02/15/2016

    But do you lose your job in bankruptcy? Does someone buy the group? Where does the work go? Could you find a new job quickly?

    A lot of doom and gloom on this board. If you bought the house, could you sell it quickly if needed? Without additional details, I’m not saying you have to back out.

    #193262 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018
    Earnest refinancing bonus

    @jhwkr542,
    One doesn’t know details until it’s too late.
    One case with three different results:
    Enron and it’s auditors AA
    1) Some people lost job, retirement funds, went bankrupt and never recovered.
    2) When AA went down, one whole division of the Houston office (admins, staff, and partners) didn’t miss a paycheck. No interviews, bring the whole group, we will workout the details later.
    3) Only a few hit the papers and trials for either prosecution or defense. Not one is prominent anymore.

    In your career planning, drug running and bankruptcy should both be viewed with speculation. Not worth the time getting into details.

    #193265 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1807
    Joined: 02/11/2019

    @mpmd,
    “Trying to decide how I feel about this. It might leave the seller with the impression/worry that there was something wrong with their place when in reality the entire issue is on the buyer’s end.”

    Please don’t be offended, I am really at loss. If one is facing serious serious financial consequences, in what way is it ethical to value the other parties “worry” over your well being?

    Terminating the contract one way or the other is a negotiation, although one that was unanticipated. Honesty and aggressive negotiation aren’t really deceitful or unethical. Full disclosure will often hurt you.

    The attorney may say, “Unsatisfactory, withdrawn.”
    Anything else is a basis for challenge up to and including specific performance and reimbursement of their legal fees. It is unfortunate not deceitful or unethical.

    Click to expand…

    I agree with you that “unsatsifactory, withdrawn” is fine.

    What I was quibbling with was what I read, possibly incorrectly, as a suggestion to indicate that issues came up on the inspection  when in fact nothing major did. Again if I read that incorrectly I apologize/stand down etc.

    I also think everyone could consider this from the seller’s perspective and consider if you were them if you would go after some of the earnest money. I would.

    Click to expand…

    I was not suggesting to be deceitful.  When you have a home inspection we all expect to find a lot of things depending on the age and condition of the home.  We overlook a lot of the minor stuff because we are reasonable people and there is wear and tear and nothing can be perfect.  If you demand that the new home be perfect the sellers will justifiably think you crazy and move on.  We worry when we actually want the house because you do not want the seller to get fed up and move on.  If the OP did not sign off on the inspection yet he can ask for what ever little thing to be fixed. He can get real picky all of a sudden.  That leak in the facet, scuffed corners, bunched carpet, dented molding…  Oh the furnace is close to the end of its usual life I want a credit for that.  Worse case the seller actually fixes all this stuff and at least you end up with a good looking house.

    I do not suggest making up anything because that can come back to get you and I agree it is not right.

    “Never let your sense of morals prevent you from doing what is right.”

    #193610 Reply
    Liked by Zaphod, MPMD

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