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Saturday, December 12, 2009

The Bank Grinch Who Stole Christmas

"Every Who down in Whoville liked Christmas a lot, but the Grinch, who lived just north of Whoville - did not. The Grinch hated Christmas - the whole Christmas season. Now, please don't ask why; no one quite knows the reason. It could be, perhaps, that his shoes were too tight. Or it could be that his head wasn't screwed on just right. But I think that the most likely reason of all may have been that his heart was two sizes too small." From How the Grinch Stole Christmas
In February I began working with a young Key West couple and their young son, who I'll call "O". Back then "O" had just started to take the timid steps of a one year old. Mom and Dad and "O" live on a little boat in Key West and they are hoping to find a modest house that they can afford. I warned the parents not to teach "O" how to climb stairs. But his mom said he had already figured out how to climb the ladder on the boat and work his way onto the deck. She added he had been taking swimming lessons. But getting him onto land was their main concern. Green grass and land, not green eggs and ham.

My buyers have the pre-approval letters from local and national lenders. They have had their attorney review the initial contracts we submitted. When my buyers decided to make an offer on a short sale property, they went back to the attorney just to make sure the forms were correct.

We got several "Seller accepted another offer" phone calls or emails. When a particularly well located, charming, and affordably priced condo recently got listed, my buyers immediately submitted an offer. There were apparently multiple-offers so the bank owner require each potential buyer to submit the best and final offer. We never got any response from the listing agent, but I did see that the mls listing status was changed to "contingent", meaning a contract had been entered into between seller and buyer.

My buyers lost a couple of other properties where the seller requested a "best and final" offer. These were for bank owned properties and I figured my young customers had a good shot at each of the properties. But none of their offers got accepted. Except until last week. Finally, my customers' offer on a nice little Key West condo got accepted. We had arranged for a local lender to fund the purchase and felt reasonably assured the deal would be closed before December 31st. The seller's agent called me a week ago and said my customers got the property.

The seller's agent sent me a detailed email acknowledging the seller (a really Big Bank in Texas) had accepted the offer and stated the buyer must sign an additional standardized contract of sale form drafted by the bank as seller.

I told my customers early on that banks are always the last to sign any contract. Banks do not want to re-negotiate a deal once the deal has been struck or approved. So the bank waits till all details are agreed upon and signed by the buyer before the bank signs.

The listing agent changed the status in Key West Association of Realtors database that same day. He sent me the required bank contract forms for my buyers' signatures. Since the bank contract forms were something "new", my buyers took the contract to their attorney for review. The attorney found a couple of issues that caused some concern for my buyers, but they signed the forms without change. I sent the bank's addendum to the seller's agent last Friday at about 4:15 PM. Later that night I got a phone call followed up by an email from seller's agent advising that there was another "new" form that the bank seller also required. I printed it out and forwarded it to my buyer. They signed it and I returned it to Seller's agent very early Sunday morning.

Late Monday afternoon I got a phone call from seller's agent who told me the Seller (the really Big Bank in Texas) had decided to accept a lower priced all cash offer instead of my buyers' offer which it previously accepted. The seller's agent apologized and said the bank asset manager said since the bank had not signed my buyers's contract it was free to accept another offer.

The funny thing is the Seller's agent felt we had a deal because the agent urged me to get the final bank contract forms signed and returned within 48 hours of the bank's acceptance. We did that. So we had (1) a phone call advising my buyers' offer was accepted, 2) an email confirming that my buyers' offer was accepted, and (3) the Seller's agent changed the status in the mls. But the guy at the Big Bank in Texas, just north of Whoville and way far away from Key West, did not see it that way.

Just who is this Texas Grinch and how can he spoil little "O's" Christmas by taking away his house? Well, Dr. Seuss probably got it right when he wrote "Now, please don't ask why; no one quite knows the reason. It could be, perhaps, that his shoes were too tight. Or it could be that his head wasn't screwed on just right. But I think that the most likely reason of all may have been that his heart was two sizes too small."

I guess the bank asset manger at the Big Bank in Texas doesn't subscribe to the Horton the Elephant's School of Ethics

"I meant what I said, and I said what I meant.
An elephant's faithful, one hundred percent."

Little "O" is not going to get his new house for Christmas this year!

But we will eventually succeed.
Yes we will indeed! (98 and 3/4 percent guaranteed)!


Anonymous said...

Unfortunately you hear this story more and more often. The ones who NEED to buy the houses - people who will LIVE in them, and build/rebuild their community - are the ones being shut out by banks and speculators. It's wrong. Good luck to your prospective buyers.


Gary Thomas said...

They are a nice young local couple living on local income. Translated: not a lot. They have a sweet little boy and this was a place they could afford.

They offered more than the price the bank decided to accept after it accepted their offer.

It makes no sense so me.

Thank you for your kind thoughts.


Anonymous said...

I believe that if it was meant to be it would have happened. The perfect home for this nice family is out there and will be found. And when you find it for them, they will be overjoyed and then they will find their home in paradise. It will be the best yet and all the setbacks will lead to their dream home I am sure. Keep the faith. Peace.

Anonymous said...

This is a new wrinkle I haven't heard of, but I got news for them should they get lucky enough to sign a sales contract that holds. Be prepared to jump through flaming hoops and small rabbit holes to actually get the bank you are prequalified with to give you the money...We just closed on a house on Elizabeth St, and I can assure you, it wasn't easy nor for the faint of heart. But we finally did get our "dream home" in KW.


Gary Thomas said...



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Gary Thomas in a Nutshell

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Key West, Florida, United States
I first read about Key West in a magazine called "After Dark" sometime in the mid 1970's. But it wasn't until March 1984 that I made my first visit to the island that would become my home. I had two weeks for a vacation and reserved a room at Colours Guesthouse (now Marrero's Guest House) for one week. I thought that if I didn't like Key West, I could always go back to Miami or Ft. Lauderdale for the rest of my trip. But after a couple of days in Key West, that was no longer a consideration. But when I wanted to extend my stay for the extra week I found there was no room at the inn. The guesthouse owner did find me a room at LaTeDa, the infamous guesthouse/restaurant. That's a story I'll write another day. But those two weeks in Key West gave me the realization that I had found Paradise. Key West has been my home since 1993 and my only regret is that it took me so long to get here. I am a full time Realtor at Preferred Properties CRI. Let me help you find your new home or business in Paradise. Living in Paradise is not a slogan, it's a way of life.