DUAL AGENCY not disclosed, pressuring 200k over asking with seller financing

[Amanda Kwem]

I'd like your opinion on a matter.  Myself and 2 of my business partners/friends are first time home buyers looking to purchase in a hot market in CA.  There is a house we like and offers were due yesterday.  List price is 998k but agent is insisting and wrote paperwork for us to sign for a purchase price of 1.2 million.  They said they need this price to be "competitive, though i personally don't agree with offering that much over asking.  I was at work yesterday and I was being pressured to sign the contract as offers were due yesterday and I randomly asked if they were also representing the seller and they said yes.  It's 2 co-agents and I was pretty upset and said that should have been disclosed.  Though offers were due yesterday they have extended it for us and are doing everything in their power to get us to sign.  They've promised my friend (who loves the house and isn't smart financially imo) that they can get us seller financing with no money down (with either a program or getting the seller to agree) but everything seems fishy to me.  In the contract they were trying to get us to rush to sign all contingencies were waived except a 7 loan contingency.  I of course pointed this out.  They said they have other offers, some above asking (which I don't deny given the market and us being in the Bay Area).  My questions are

1.  Are they simply trying to get us to buy so they get double commission

2. If there is a loan contingency but we use seller financing, what happens if we don't agree  to the terms of the presented loan? Will we be out of any money

3. dual agency seems like a terrible idea, pros and cons

4. Offers were due yesterday but they're still going back and forth with me and editing the contract in an attempt for us to comply. why?  There has to be other offers that are above asking with bigger downpayments

5. Does seller financing benefit the seller?  Taxes? getting the house back if anything goes wrong? 

I asked about the terms of seller financing but they said we'd be to sign an offer to present a written offer to the seller first who knows nothing about seller financing but they are confident that they can convince them.  Is that correct?  The loan contingency is 7 days.  What happens if this isn't figured out in 7 days of signing? Do I lose the earnest money?  

Personally this has red flag all over it and I won't be rushed into signing anything  We ended up viewing the house 2 days before offers were due.  What are their motivations?  Anything wrong of illegal here.  This is a very simplified summary by the way there is so much more I can write.  Even after a heated text thread of me laying out all of my concerns and them saying we should pass on the house (after I pretty much told them I don't want the house), they still came back saying they added a loan and appraisal contingency and if we are okay to sign. WHY?

[Caroline Gerardo]

Three "friends" walk into a 2 bed listing and are buying owner occupied. Well that's going to take some creative 'splaining Lucy if you want a jumbo loan. 

Illegal third bedroom means with a conventional appraisal it might need to be ripped out to close or have zero value. Is seller willing to get it grandfathered into compliance? I think the answer is no.

You do not have a pre-approved loan. You need a written commitment letter with the rate, terms, list of conditions needed to clear to close. 

Listing agents want you to offer very high. Maybe this will get the seller to play but you have nothing, only sand.

Give me the address in DM I can find three comparables in minutes. Listing agent should have given you the comps. If there are no comps you cannot get a loan. 

Seller is going to carry paper... cough... but you have no idea if the house is free and clear? Listing agent can give you title report. Your purchase offer should state the terms and conditions YOU want for the loan. Offer them 30 year loan fixed rate at 7% no points (you said 100% financing but really what seller is going to do that soooo risky but go ahead put it in the offer and let them counter). Have the loan be due and payable in seven years, this gives you time to figure out IF you can refinance or sell.

What is the agreement between the three of you as owners and buyers? Who gets the master bedroom who pays for what what happens if you lose your jobs what if you three divorce... who buys the toilet paper (be nitty gritty). You can't use a LLC for conventional owner occupied. Jumbo loans are picky about income and credit you must be financially strong.

You can always write an offer on yellow notepad paper and not be represented by an agent. Make bullet points, follow a Real Estate purchase contract but don't use the form as you are not experts. Everyone signs and dates. The title company/escrow settlement can type the contracts. Yellow note pad hand written holds in court and indicates you are not experts and this is important.

HAPPY to recommend a local agent. I'm in Moss Beach today and San Rafael tomorrow, stop by and chat. The three of you need to all be clear about your plan.