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?

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.
posted by slyboots421 to Human Relations (42 answers total)

This post was deleted for the following reason: poster's request -- cortex

You need a consumer protection attorney, yesterday. Call your closest legal aid agency, explain the situation and take the referral they give you.
posted by crush-onastick at 10:40 AM on December 18, 2013 [3 favorites]

I don't get what is happening here. The appraisal came in *lower* than you thought it would, and so you, *as the buyer* are paying extra to get a house that's worse less than you initially thought? Under the table in an illegal way?

Clearly, what you *should* do is consult a lawyer.

You can stop paying anything you want to, the other party can sue you if they don't like it.
posted by tylerkaraszewski at 10:42 AM on December 18, 2013 [8 favorites]

Wait, what? Lawyer, right now.
posted by thomas j wise at 10:44 AM on December 18, 2013

tylerkaraszewski, when you put it like that.... haha.

The way it was phrased to us was "Well, I was expecting to make $xxx" and I fought against it the whole time with my boyfriend. My thought was, sorry, but that's the risk you run when you flip houses! Then since he agreed to still do the closing costs I finally relented thinking this side agreement was the least we could do.

I forgot to mention, but when I asked him as a test if he preferred cash or check he told me "Don't matter." Well, it "do" matter, because cash is not traceable! (I have paid every month by check) I also had to request a copy of the "promisary" note and got a visit from him a few days after he dropped it off, to "make sure I got it." I had not paid him yet that month and was not planning to until I got the copy of it. I said "Yes, I did get it in my mailbox, and I know I owe you some money." He said "Oh, no no, don't worry, I mean I just came straight from the airport to make sure you got that." Right...
posted by slyboots421 at 10:47 AM on December 18, 2013

The usual recourse with these things is that when the house appraises for less than the purchase price, you can either walk away from the deal, or you can re-negotiate the price DOWN!

If Jim didn't want to pay closing, he could totally back out, or propose something else.

Here's my question. How much of the $2,800 have you paid back? Did you eventualy buy the house for $76,000?

How much more are we talking about here? If it's only a few hundred more, just pay him back and close the book.

I'm assuming you're not expected to send him money forever, right?
posted by Ruthless Bunny at 10:49 AM on December 18, 2013

This sounds like a scam
posted by lpcxa0 at 10:51 AM on December 18, 2013 [1 favorite]

Unless I am getting this wrong, you bought the house for the price of a (lower than anticipated appraisal) and are reimbursing the seller for money he subsequently lost on the deal compared to his expected profit?

Um. What?

This is a total scam.
posted by Brockles at 10:51 AM on December 18, 2013 [8 favorites]

"Well, I was expecting to make $xxx"

The proper response to this would have been, "Tough shit, the house isn't worth that much."

Stop paying him. When he asks about it, tell him to sue you.
posted by tylerkaraszewski at 10:53 AM on December 18, 2013 [12 favorites]

As a paralegal for a real estate attorney, this question is making me cringe SO MUCH.

I'm not familiar with how real estate closings occur in Michigan (I'm in New York), but was there anyone who was on *your* side in this whole matter?

(Hint: The realtor was not on your side because he/she did not complete the sentence "[you] need to come up with $6000 more to bring to the closing" with "WHICH IS COMPLETELY INSANE, LET ME TALK TO THE SELLER AND WORK ON THIS FOR YOU.")

If there's any way you can get a time machine and lawyer up a little over a year ago, DO IT.
posted by Lucinda at 10:55 AM on December 18, 2013 [2 favorites]

Slightly more helpful response here - did the bank you got your FHA mortgage through say anything about this?
posted by Lucinda at 11:00 AM on December 18, 2013

Spend some of the money that you are not going to be using to pay him anymore to see a lawyer. Not just because "legal question: see a lawyer," but because (1) seeing a lawyer will give you a lot more comfort about your plan to stop paying him; (2) a lawyer can tell you whether you might even have a possibility of recovering this money you already paid (unlikely and probably not worth it for a number of reasons); and (3) if you are confronted about it you can say, "This is something you need to talk to our lawyer about, I've been advised not to discuss it with you."
posted by MoonOrb at 11:03 AM on December 18, 2013 [3 favorites]

So here's what I'm seeing:

1. You originally agreed to buy house for $84,000 with the seller paying closing costs (fine)
2. House appraised for $76,000 so seller no longer wanted to pay closing costs (also fine and totally reasonable on their part)
3. You then agreed to seller paying closing costs and you paying back the seller $2800 of said closing costs over an extended time period. (and here's where it gets fishy)
4. You have not paid back all of the $2800 but are now wanting to know if you can just stop paying them (lawyer)

You really need a lawyer here because #3 could be against real estate rules/laws, is most definitely an issue for your mortgage holder because that is another "loan" that you took out but didn't disclose. and #4 is basically you not wanting to repay an amount of money that you agreed to pay which is at least unethical.

Next time you buy a house have your own realtor.
posted by magnetsphere at 11:07 AM on December 18, 2013 [14 favorites]

Next time you buy a house have your own realtor.

If the seller is paying the commission for both realtors (which happens where I am), your realtor is not on your side.

The only person on your side is the person you are paying out of your own pocket, which is usually your attorney.
posted by Lucinda at 11:16 AM on December 18, 2013 [1 favorite]

Just writing to give you another perspective on this, and in particular NOT to offer you legal advice.

Could you be more explicit about how much you ACTUALLY AGREED to pay Jim for this house at each stage of the process? I am confused about what that exact number (or, those exact numbers, if it was re-negotiated) was, and what you consider to be the impact of the single low appraisal (out of 3!) on that amount.

Because my wife and I just last year paid a contracted amount that was substantially over the appraised amount. The appraisal is just for insurance and financing; because we had enough of a down payment so that we didn't need to finance the full 80%, it was just like "well, that appraisal seems below what I [seller] consider the fair value, do you still want it at the contracted price or not?" - and we did still want it.

What I'm saying is, the low appraisal does not necessarily give you a discount off the originally agreed price. Typically there is an appraisal CONTINGENCY, which allows you to BACK OUT of the purchase as the buyer if it appraises low, but it does not automatically alter the price - you have to negotiate that with the seller. Did you? And if it was negotiated, there is no reason the purchase price has to go all the way down to the appraisal amount; the point of negotiation is that you both get less than you fully wanted.

To me the bottom line is that, if you ultimately agreed "I will pay you $X for this house," you should go ahead and pay the full $X, regardless of how it's structured.

Also, can you (or anyone) explain the basis for your belief that it is "illegal" to do a side-agreement outside the formal purchase paperwork? Is it an FHA thing? I will admit I am not familiar with FHA financing and purchase rules.
posted by Joey Buttafoucault at 11:16 AM on December 18, 2013 [2 favorites]

On further review, I agree with magnetsphere, whose version is more concise than mine but (I think) comes to a similar conclusion.
posted by Joey Buttafoucault at 11:18 AM on December 18, 2013

Also, can you (or anyone) explain the basis for your belief that it is "illegal" to do a side-agreement outside the formal purchase paperwork? Is it an FHA thing? I will admit I am not familiar with FHA financing and purchase rules.

Not just FHA
posted by Lucinda at 11:18 AM on December 18, 2013

I would definitely lawyer up because if this agreement gets on the books, your mortgage company is going to be way up in your business, even if it's a relatively small amount.
posted by Think_Long at 11:23 AM on December 18, 2013

What does your sales contract say?
posted by Flood at 11:32 AM on December 18, 2013

lawyer up pronto. as a retired lawyer who also held a california real estate broker's license for four years, my opinion about how you handled this transaction would be too caustic to survive moderation. holy shit!
posted by bruce at 11:40 AM on December 18, 2013 [15 favorites]

Not just FHA

Huh. OK then. Yeah, I would say the OP should lawyer up, in that case. From the description in that brochure, if there was any "fraud" that occurred (and I'm using that word because it was used throughout the linked document, not to imply that there was any actual crime or tort committed here), then the buyer may be at least as much to blame as the seller in such instances. That is, in mortgage fraud, it is generally the buyer who is thought of as "defrauding" the lender, by misstating income or obfuscating the source of the down payment or whatever.

I point this out because, despite what seems to be the general perception in this thread that the flipper is screwing over the OP, it could also appear from the outside like the buyer is the bad actor in this situation if it were to fully come to light.
posted by Joey Buttafoucault at 11:44 AM on December 18, 2013 [4 favorites]

> Would it be okay for me to stop paying him?

Of course not. If you loaned someone $2800 on trust, would it be OK for them to stop paying you as long as you couldn't effectively enforce it?

I suspect you can get away with not paying him, for whatever that is worth. I don't see how you can think it is "okay" to stop paying him when you are living in the house that you only got because of this (admittedly sketchy) loan from Jim.

Maybe you shouldn't have skirted the law like you did, but you did, and you're not giving the house back, are you? Breaking the deal now on the excuse that it was sketchy is lame.
posted by mattu at 11:48 AM on December 18, 2013 [9 favorites]

I'm with Mattu.

I don't understand all the details of the transaction. It doesn't seem to make sense.

What does wen clear though is that at the end you agreed to pay the seller an additional $2800 after the fact so the deal could go through.

Don't be that guy who walks away from a good will handshake debt. Even if you aren't legally bound, even if you could get away without paying, you are still morally bound. Don't be a welch.

The only exception is if you were in some other way ripped off by the seller, but I don't see that from what you've written. It seems like he wa a good guy to work with and gave you a good deal.
posted by alms at 11:58 AM on December 18, 2013

Well, it "do" matter, because cash is not traceable! (I have paid every month by check)

The way I see it is, your cancelled checks prove that you really understood and agreed to what was stated in the promissory note, which hurts you in court if you say that you didn't understand. Clearly, you did. And yes, they misspelled the word, but you signed it.

It's long past the time for being clever. You've been paying a little less than $80/month to them, and you still owe $1800 on the note. If you can find a lawyer who can get you sorted for less than $1800, you should do that right now, because you could be making things even worse for yourself as time goes on.

If you can't get a lawyer to sort you out for less than $1800, I'd recommend accelerating your payments to get this paid off as soon as possible just to get as far away from it as you can.
posted by Houstonian at 11:59 AM on December 18, 2013 [6 favorites]

If you couldn't come up with the difference between what the seller wanted and what the bank would finance, the proper response would have been, "I'm sorry, we just can't afford it."

But you wanted it, so you did something that's both illegal and unethical--you took on another loan without disclosing that fact to the bank.

Leaving that aside, it seems to me that Jim actually did you a favor--he gave you an unsecured loan to make it possible for you to purchase the house that you wanted. It wasn't a disinterested favor, as he got a better price for the home--but it was something you wanted, and he took a risk in accommodating you.

If you think the fact that the deal was "sketchy" is somehow moral grounds for you to renege, please remember that you were an equal and willing participant in the sketchiness.

And lastly, given that you did in fact break the rules, you might consider that Jim does have some leverage--if he sues you, what you did will become a matter of public record.
posted by bricoleur at 12:07 PM on December 18, 2013 [10 favorites]

Please message the mods and have them anonymize this question immediately.
posted by payoto at 12:14 PM on December 18, 2013 [3 favorites]

Have your floors fixed and deduct that from what you owe the guy.

If I'm reading you correctly, the person you should be angry with is your boyfriend for pushing you into this illegal agreement, and yourself for going along with it.

What you did opens you up to SO much liability, the cheapest thing for you to do is to shut up about it entirely and pay up.

As the contractor, flipper dude needs to address your floors.

Get some estimates, find a professional company to fix the floors and "negotiate" with the flipper dude with a copy of the estimate and pics of the current floor in hand.

Good luck.
posted by jbenben at 12:19 PM on December 18, 2013 [1 favorite]

You need a lawyer's advice, not the internet.

That being said, I want to underscore, as others have, that the fact is that you are not trying to get out of this "contract" because it's wrong, or because you didn't understand it, or because you were pressured -- but because it no longer seems beneficial to you. This fact is probably not going to work in your favor.
posted by sm1tten at 12:21 PM on December 18, 2013 [7 favorites]

Do I understand the numbers right?

Original deal: You agreed to pay $84,000 for the house and Jim would pay $6,000 to close (so Jim gets roughly $78,000)

Second deal proposed by Realtor: you pay $82,000 ($76,000 plus $6,000 closing), Jim gets $76,000

Deal you and Jim agreed to: You pay $76,000, Jim pays $6,000, Jim gets $70,000. You agree to pay $2,800 to Jim so at the end of the agreement you have paid $78,800 and Jim got $72,800 ($78,800 - $6000 closing costs)

Doing these side deals is usually frowned upon/unethical/illegal depending on jurisdiction. But they happen and I know quite a few people that have done these deals to get into a house they otherwise would not have qualified for. You paid less for the house than you planned to ($8,000 less if my figures are right), of which $2,800 went to Jim so the you ended up paying $78,800 for a house you were willing to pay another $5,200 for and Jim got $5,200 less than he would have if the house had sold for the original $84,000.

I would finish paying it off in good faith, he didn't put crazy conditions on the payments or an usurious interest rate and the deal is what got you in the house.
posted by saucysault at 12:28 PM on December 18, 2013 [2 favorites]

I think I need to bullet-point it out for the exact amounts per request above:

-Jim expected the house to sell for about $84,000 (based on his experience, what he paid for it, etc. etc.)

-There were three appraisals, and two came in right at $84,000. Then the third one came in at $76,000 (they were taking other recently-sold houses in the neighborhood into the equation that apparently the first two had not). There were all kinds of shady things happening, like another realtor from our guy's office showing the house to a potential buyer who wanted it to be a land-contract.

-Jim called this a "discrepancy" and while I protested this initially, we agreed upon $2800 to be paid at $100 per month until paid off. It's not a discrepancy if your investment didn't pay off like you thought!

-The $76,000 mortgage is held by a bank and being paid on time, monthly, by my boyfriend and I.

This agreement does not involve the mortgage holder or anyone besides Jim and I. As far as I am aware, the realtor was not even aware of this.

Lucinda - there was no one on our side for any of this, which is why I still feel the sting of "Am I being screwed over?" even a year later. The realtor was already attached to the house and works on all of Jim's flips. He literally had the easiest job in the world - he didn't have to show us any houses, "sell" us on anything, and yes, I almost screamed when he told me what *I* had to do to make it work. The whole process was incredibly frustrating as this was my first home purchase. We were given several different dates of completion, and all got pushed back, and you would think I was trying to pull the teeth out of the head of the realtor for all the communication I'd get back from him. Meanwhile we were trying to keep a roof over our heads since we were renting previously, and then to be told that it was basically dead in the water two days before.... Needless to say I was not sending thank-you bouquets to him.

So we have paid $1000 out of the $2800 "agreed" upon. Again this is not part of the mortgage and no banks or anyone reputable are involved.

I do appreciate the suggestions to get a lawyer and direct any questions Jim may have to said lawyer. Thank you all for your advice!
posted by slyboots421 at 12:30 PM on December 18, 2013

You need a lawyer, because this relatively small debt could have disastrous implications for you. First of all, if your bank gets wind of this somehow, they could cancel your loan or do all sorts of things to make your life hell. That might seem far-fetched to you, but I've worked on legal projects related to the banking and insurance industry and it does happen more frequently than you think. In most states (if not all), it is trivially easy for a contractor to place a lien on property for unpaid debts. This is one way that your bank could find about this side deal -- which looks very much like you committed fraud against the bank. I can also think of another half-dozen ways this could go very badly for you, far worse than the annoying $2800 cost, and you need to get this resolved ASAP. You need a lawyer who can advise you as to the best course of action in your state. Protect yourself.
posted by stowaway at 12:33 PM on December 18, 2013 [5 favorites]

I feel kind of icky about this but in a different way from the rest of the respondents - you were willing to pay $84,000 for the house. You still wanted it when the estimate came in - you just didn't have the $6000 you'd need to pay closing.

The owner (yes, he flipped it, but he was still the owner) offered to still cover the closing if you'd pay him $2800. He essentially was offering an informal note. You agreed to it, and now are (apparently) trying to get out of paying the loan you'd agreed to.

It is hard for me to see the difference between this and your Dad loaning you $2800 and asking for it to be repaid. I say - pay the remaining $1800.
posted by arnicae at 12:35 PM on December 18, 2013 [7 favorites]

Disclosure: I work as a real estate title examiner, which means in most cases, the money I make comes out of somebody's "closing costs". Deals fall apart all the time, which frequently means people don't want to pay me for the work I did on a deal that didn't go through, which in some cases makes me-paying-my-rent a dicier proposition than I would like. So understand that I am coming at this from a perspective where people welching on paying closing costs hurts me right in the bank account.

What you're doing here, in order to rationalize not paying Jim, is mixing and matching line-item costs however you want. "Closing costs" aren't a nebulous, wishy-washy thing. People (like me) spent time, doing research, putting together the paperwork, making sure the right steps were followed so that you can sit back and confidently say "I own this house" instead of having your deed be some misspelled piece of paper that was signed on somebody's back and having your ownership of this house be just as sketchy as the rest of all this is. Those people need to get paid for their time, by somebody.

In this case, that somebody was Jim. He paid actual money out of his pocket to get the paperwork and the closing done right. He wrote out a check to someone else for the amount of the closing costs, maybe not at the closing, but shortly afterwards. You agreed to pay him back for that; it was a sketchy and illegal side-deal, but it was still an agreement.

This is not about the badly-refinished floors - the badly-refinished floors, and whatever else, those are probably the reasons you got the house for [$76,000 + closing costs] instead of getting it for $84,000. You're still coming out $5,200 ahead. If you think the house, because of badly refinished floors and whatever else, should have been appraised at even less than $76,000, that is an entirely separate issue from the closing costs.

Legally? You can probably get away with not paying Jim; he will learn a tough lesson about why you get lawyers involved earlier rather than later, and he will be less inclined to make side-deals in the future. But morally? I think you owe Jim the money. He might also owe you a better floor, but the two things are not connected.
posted by mstokes650 at 12:36 PM on December 18, 2013 [17 favorites]

-Jim called this a "discrepancy" and while I protested this initially, we agreed upon $2800 to be paid at $100 per month until paid off. It's not a discrepancy if your investment didn't pay off like you thought!

It doesn't matter what you call it. You agreed to pay Jim $2800 less via the mortgage and $2800 more via a secondary loan. You are attempting to rationalize failing to pay Jim what you agreed to pay him.

This agreement does not involve the mortgage holder or anyone besides Jim and I. As far as I am aware, the realtor was not even aware of this.

As I'm sure you're aware, agreements between two parties are enforceable. It is not necessary to have a bank to have a loan.

Lucinda - there was no one on our side for any of this, which is why I still feel the sting of "Am I being screwed over?" even a year later.

You seem to be attempting to fix your annoyance of having signed what you consider a bad deal by breaking an agreement with Jim. The problem here is not Jim, it's that you agreed to a deal with Jim. You were never forced to sign anything (mortgage or side deal) by Jim. Your annoyance should be directed at yourself, and Jim should not have to pay for your bad feelings.

The whole process was incredibly frustrating as this was my first home purchase.

This, of course, in no way invalidates a mutually agreed upon loan. Again, this is rationalization for your failure to pay back a debt you agreed to.

So we have paid $1000 out of the $2800 "agreed" upon. Again this is not part of the mortgage and no banks or anyone reputable are involved.

You did not "agree" to pay $2800, you did agree to pay $2800. The fact that it does not involve a bank does not change your agreement. Pay your bills.

I do appreciate the suggestions to get a lawyer and direct any questions Jim may have to said lawyer. Thank you all for your advice!

Lawyers do not work for free and lawyer's fees will rapidly consume $1800 and may not even get you anywhere - in other words, there's a distinct change that you might pay for a lawyer and still end up owing money.
posted by saeculorum at 12:41 PM on December 18, 2013 [5 favorites]

I do agree, mstokes650, and arnicae too. I feel icky about the whole thing, and the reason I didn't walk away from all of it was because he wanted it to work out (mainly, as we learned, because he was not interested in being a landlord for a land-contract buyer).

I know that closing costs go to someone and it's for hard work, and I'm definitely not saying that it shouldn't or that that money didn't matter. It's just very frustrating to still feel like we're renting from this guy because I drop him off a check every month. It's frustrating that I advocated for myself during the whole process and while yeah, on its face, it's a good deal - coming out $5,200 ahead - but I just feel like we're being punished monthly because the appraisal didn't come in high enough. Yes, I was prepared to mortgage $84,000, but that's ONE payment (that wouldn't be that much different per month from what we pay now) and not remembering to pay Jim as yet another line item on a budget. Which seems silly, I know.

Like I mentioned originally, the fact that my friends say "Oh, are you still doing that?" made me think I was being suckered.
posted by slyboots421 at 12:48 PM on December 18, 2013

For the remaining $1,800 you owe, I'd say pay him and be done.

You bought the house for $8000 less than you were originally willing to pay, and he wanted $2,800 cash in hand to make that happen.

This is the deal YOU made with him.

The transaction was less than optimal, but you're still WAY ahead.

As for the floors, they were okay when you closed, you don't get to decide retroactively that they now suck to the tune of $1,800.

You incurred this debt in good faith, you should just pay it off.
posted by Ruthless Bunny at 12:49 PM on December 18, 2013 [4 favorites]

Yes, I was prepared to mortgage $84,000, but that's ONE payment (that wouldn't be that much different per month from what we pay now) and not remembering to pay Jim as yet another line item on a budget.

Would you feel better about things if you took out a 401(k) loan or credit card advance or loan from parents to pay off the $1800? Consider that your mortgage is amortized over 15 or 30 years, compared to this loan to Jim over just a few years. So of course your payment wouldn't be much higher if you'd just rolled an extra $2800 into the mortgage; on the other hand, you'd be paying it, plus interest, for the entire life of the mortgage.

Finally, I want to reiterate my recommendation that you have the mods anonymize this post and your responses. What you are describing is mortgage fraud, and because it's an FHA loan, the federal government is a defrauded party. This brings the False Claims Act into play, and there is a whistleblower provision that allows anyone to sue on behalf of the government. Hopefully nothing bad will come of this, but why even leave that possibility open?
posted by payoto at 12:56 PM on December 18, 2013 [3 favorites]

This agreement does not involve the mortgage holder or anyone besides Jim and I.

Yes, it does. It's a debt instrument related to a sale of real estate. That automatically makes it the mortgage company's business.

I'm really not sure there's any better way of saying this than others have, so I'll be concise: This is so fishy you could open a wholesale seafood distributor.

But the easiest thing to do here is to just pay the $1,800 and have done with it. True, what happened here may well have been illegal, but the seller isn't the only one that stands to get in trouble if word of this gets out. You could very easily get in trouble yourself. Even if you didn't, you'd probably have to pay a lawyer to defend yourself.

Just pay him and let this be a lesson to you: no funny business next time.

Also, jointly buying property with someone to whom you are not married is always a bad idea unless you've got a very clear contractual arrangement between the two of you. I'm just sayin'.
posted by valkyryn at 1:00 PM on December 18, 2013 [10 favorites]

speak with a lawyer. don't listen to any advice here.
posted by Ironmouth at 1:18 PM on December 18, 2013 [4 favorites]

This is one ugly situation. I feels for you, but I'm here to tell you that Ironmouth may be giving you the best advice here. You should have hit the lawyer to assist you on your purchase. Problem is, now you're probably going to spend at least $1800, if not more, on clearing this mess up.

Real estate sucks. Our realtor screwed us by their neglect in writing a contract properly. The only one that profited was the lawyer, but at least he was on our side.
posted by BlueHorse at 1:44 PM on December 18, 2013

[Comment removed. slyboots421, I can appreciate this is a frustrating situation for you, but please do not snap at answerers, folks here are making a good-faith effort to help you out.]
posted by cortex at 1:48 PM on December 18, 2013

Speaking from the perspective of a reformed con artist: you seriously need to put this thing under wraps. No more chit-chatting with friends about it; no more acting naive and OMG golly gee whiz real estate is sooo tricky! You don't seem to understand the gravity of the situation here, despite being told repeatedly that you need to BE COOL and not dig yourself deeper.

No, you are not being ripped off. Ditch the victim mentality, and adopt a get-yer-ass-out-of-hot-water one instead.
posted by nacho fries at 1:58 PM on December 18, 2013 [6 favorites]

Hi nacho fries - It was not my intention to sound like an airhead who was completely unaware of what was happening. Merely looking for advice on this forum, which I got. I've mentioned it to two of my close friends and not in an "oh boy, I'm confused!" way. One of these friends bought a house from the same guy and we commiserate about our experiences often.

If I had the option to pay him off in one shot right now, I absolutely would. But that's unfortunately not in the cards.
posted by slyboots421 at 2:15 PM on December 18, 2013

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