Paying "discrepancy" to the seller of our house - help!
December 18, 2013 10:35 AM Subscribe
A little over a year ago I bought a house. Due to multiple appraisals required (FHA) the final sale amount of the house was lower than what the seller (a flipper) was anticipating. For the past year and for the next foreseeable year plus, my boyfriend and I have been paying him monthly to make up for what he calls "the discrepancy." Can we stop paying him?
posted by slyboots421 to Human Relations (42 answers total)
We were introduced directly to Jim the flipper after he was already in possession of this foreclosed house and beginning to work on it. Since we met with him early enough we were able to pick out the wall colors his workers painted, etc. It was a pretty great deal! He anticipated from the get-go that it would be $84,000 to sell. Two appraisals came in with that amount, and then the last one came in at $76,000.
The real estate agent (who could not have possibly done less for either the seller or myself, a total weasel) called me on Wednesday before the Friday we were due to close and told me that since there was this big difference, Jim was no longer paying the closing costs as had been previously discussed, and I would need to come up with $6000 more to bring to the closing. Which I definitely did not have. After this conversation, where I hung up thinking we'd lost the house, Jim the seller called me and said "Don't talk to anyone, this is your house as far as I'm concerned, I want you to have it, we can work something out."
We called him that night and went over what had happened with the appraisals, etc. and Jim said that we had to do something about the "discrepancy." It was tough because he still paid our closing costs as long as we agreed to pay him $2800 over the course of however long. We were desperate, and he was being a decent guy about it all, so we agreed to it.
So at the closing, his wife/power of attorney was there, not him. We went outside to wait while the paperwork was finalized and she checked behind her shoulder to make sure no one saw, then gave me this handwritten "promisary note" (spelled just like that... oh dear) between me and her, and gave me her back to sign it on. I considered doing a phony signature but she had just watched me sign my name roughly 1000 times on the closing papers.
I know that signing a side agreement at a closing is illegal. The more time that goes on and the more I think about how much from us was ignored during the repair/flipping process, the more angry I am that this situation panned out as it did. I was about 50% ready to walk away from the house when I first heard that the price went down so cash-in-hand at closing went up. I'm not saying that it's Jim's fault - obviously I went along with it and signed the bogus "contract" - but I'm sick of paying him. He's gotten $1000 from us now that could be going towards our principal, or going towards the floors that he claimed he refinished but that look like crap.
I doubt he could go after us with the BS agreement that I signed, since its acquisition was illegal, but here's the kicker: he and his wife live in the same neighborhood we do, and he obviously knows where we live. I don't anticipate any violence or anything but know he would pay an awkward visit once he stopped getting money from us.
Whenever I mention this to the close friends who know about this agreement, they say "Oh, you're still doing that?" leading me to believe that we're being suckers.
Would it be okay for me to stop paying him? Could he go after me and I just don't realize it? If I do stop paying should I give him written notice first?
We are in Michigan, if that matters.
This post was deleted for the following reason: poster's request -- cortex