Background info:
5 units (efficiency/1BD) MFH with below market rent (~10-15% below market) at a reasonable asking price on market in 10/21
1st buyer under contract never had legitimate documented tax return income (crooked agent was representing both seller/buyer), so deal was off.
Seller and I signed Bill of Sell/Agreement for $315k on 2/10/22 with no mortgage contingency but with inspection contingency to be closed on 3/28/2022
Inspections revealed plenty of things needed addressed (roof, gutters) and we agreed on final transaction price of $305k with closing on 4/20/2022 (new BOS addendum, etc)
Seller's agent (the crooked one) told me and my agent that the U&O was "clean" in 2/2022, but when the seller herself tried to get township to issue new U&O in 3/2022 in order for house to be sold, turned out the U&O wasn't so clean and required: sidewalks, driveway, some electrical stuff to be done prior to transfer of new owner.
In the mean time, the mortgage market skyrocketed and I was fortunate enough to be able to borrow money from family member (at 4% interests at 5yrs) to buy the multi-unit outright with cash at $305k.
As recent as mid-April (approaching our revised closing on 4/20/22) the seller was in direct communications with my agent (her initiating the contacts since 2/2022) and updated him that she was trying to get contractors to do all the required U&O work done (we know how hard it is to get good help now). She asked if I would split the costs to tree removals (not required for U&O but good thing to do anyway due to their uplifting of the sidewalks) with her in the future and we agreed, since it is fair (to be paid after closing). She notified my agent that she was going to raise her tenants' rents by $20/mo per unit, to which I asked her to raised to what I will raised them to anyway when I take over the property in May 2022 (which is ~$50-75/month unit) and she agreed.
Now the fun part! She ghosted my agent in the past 2 weeks, after I asked him about the closing, since we already missed the revised one for 4/20/22. I am already on the hook with interests being accrued with the family loan but have no rents to offset the high repayments. Today, my agent received an email from the seller addressing to both him and her own seller's agent (she's the one who accused him of being on drugs or in jail during the past 6 months from our phone conversations) that:
"To date I have had most of the repairs needed to obtain a Use and Occupancy permit from Glenolden Borough. I am still waiting on curb and sidewalk replacement, which is scheduled for May 23. The driveway will be repaved sometime after that. This has been an extremely frustrating, overwhelming, timely and costly real estate transaction.
Currently we are out of contract and my listing has expired. I no longer wish to extend the contract or my listing. I had no idea the enormous cost involved and the time needed to make all the repairs to sell this property. Whether it was from lack of agent representation, which could have prepared me for the tens of thousands of dollars needed to get a borough permit to sell , or contractor availability , or the buyer requesting price concessions for future repairs. I am no longer in a position to sell this property due to the negative impact this has had on our financial status.
I am requesting the buyers deposit be returned.
If I need to sign a release, please forward it to me at your earliest convenience.
Thank you"
I told my agent that I would pay half of all the costs that she has to pay to get the property readied to pass the U&O in order for my taking ownership.
I had already spent over $1,500 on the inspection and another $800 in fees/interests for the cash loan I received from the family member.
Do I have any legal standing to force the sale, if not, force her to pay back my expense so far, since she has not been trying to finish the deal in good faith?
thanks!
Frustrated REI
