We heard back from our house buyers yesterday. I tried to write about it as soon as I heard, but WordPress ate my post. (There’s a whole new article on conflict, let me tell you…) Essentially, the deal sucks.

They basically want $10,000 to replace the windows and HVAC in our house. We don’t think it’s reasonable to request these repairs, much less ask for so much money to perform them. I seriously question whether these folks actually want the house or if they’re just toying with us.

This mortgage stuff is going to seem complicated later when we look back at it and wonder why we are living in a cardboard box, so I’ll try to record what the deal is as clearly as I can.

Our new house’s price is $460,000. I’m sure that sounds like a lot to a lot of people, so let me emphasize this- It is a lot. We are not rich. We live in an area with a high cost of living. Berta and I only happen to make enough money that this house is on the edge of our highest affordable range of house prices. Actually, it might be a little more than we should probably afford, but Berta has it all figured out and it looks doable. When the kids aren’t in daycare any more, we’ll have plenty of money for other things - like furniture.

But the house is very nice, and no other house in our price range came close to inducing passionate feelings of “must own this” like this house does.

More money details… We offered our house for $250,000. This is at the low end of the range in which we had expected to sell the house. We were really expecting to offer the house at $275,000. We think it is easily worth as much as some price within this range.

We owe about $98,000 on the house. We would make a decent profit from selling the house even at $250,000, which we would apply as a down payment toward our new home.

So our current buyers came in and offered us $238,000. This is crazy since, as I said, $250k was at the low end of our range. We got them to agree to buy the house for $248k, contingent on several of the typical factors, including their ability to obtain financing and the inspection of the property.

We’ve had to work financing differently than what might make sense because we are buying our new house before we are selling the old one. Essentially, we’re asking the bank for two loans. One loan is our real “regular” mortgage. The other loan covers our down-payment, which we’ll shortly get back from the sale of our house. Because we know the date that our house will be sold, we were able to convince our lender to give us a two-week no-interest swing loan to cover that duration so that we’ll have all the money we need to move into the house. No problem.

While working out the financing, we had to switch lenders. The original lender was not giving us the best loan rate; not even a good rate. Even with the additional fees for switching to a new lender, we’ll make up that loss within a year by what we’re saving on monthly mortgage payments. I was really livid about this at the time. We were getting the shaft, and our realtor didn’t seem to notice. All that seems fixed now.

In any case, as we worked out the details of how the loan worked, we managed to increase our mortgage amount by $10,000 and still keep our monthly payments within a comfortable range. Actually, remember I was originally worried that the house was going to be too expensive? Well, we re-calculated the numbers with the new lender, and everything turned out great.

By increasing the mortgage, we decreased the required down-payment/swing loan, which increased the money that would be left over from the sale of our house after we paid off the swing-loan. In essense, we had found $10k that we could immediately use to furnish or upgrade our new house. We were quite happy, since we didn’t know how long it would be before certain upgrades could take place, but now we had the money for it.

While we were working out our financing nightmare, the buyers (no, not the buyers, but an inspector and one of the buyers’ parents) eventually came to inspect the old house. Unfortunately, we allowed them a very long contingency period (15 days) in which to inspect and make deliberations, and we didn’t hear back from them until the very end of it. Not knowing anything about their inspection or their thoughts on it pretty much drove us insane. Plus, the house has been off the market for the duration of the contingency period, so if it turns out they can’t take the house for some reason, then we’ve been delayed for that much longer.

Our settlement on the new house is this coming Tuesday. We need the money from the swing loan to complete the purchase of our new house. And as I said, the swing loan was originally contingent on our lender knowing that our old house will be sold.

Just yesterday, 5 days before our settlement on the new house, we learned what the buyers wanted based on their inspection of the house, and there’s no way we’re going to offer it to them: $10,000 to upgrade portions of our house.

It’s weird because I’m sure they don’t see these things as upgrades, but necessary items. To the contrary, we’ve been living in the house for a very long time without bothering with these things they’re asking for. If they unreasonably insist on this much money, then they’re basically pricing themselves out of buying the house. Although everything I’ve heard about their love of the house would indicate otherwise, I can’t think anything but that they simply don’t want the house any more and have asked for unreasonable changes in order to get out of the contract.

Of course, if you’re putting this all together, this is really bad news for us. If they pull out of the purchase, we’ve got no sale, and our lender might pull our swing-loan, meaning that we wouldn’t be able to afford our new house on Tuesday. This means more than us simply not getting the house, because we are under contract to buy the house on Tuesday. If we can’t give them money, then we could seriously end up going to jail for non-payment.

Worst-case, the sellers of our new house could ask the court to foreclose on our current house (and any other assets) to collect the money we were supposed to pay them for their house and they would get to keep their house. And since I doubt we have assets enough to cover the whole of the new house, we’d probably end up in jail, and then living in cardboard boxes on the street because our house would be gone.

So you see how I can’t help but feel like the buyers are toying with us. They know we need that money. They know we have other deadlines. They might also know that we found that extra $10,000, which is how they might have known to ask for it. (We’re using the same lender, although I can’t imagine that they’d knowingly share that information like that.) Maybe they’re still trying to get the actual price of the house down to their original asking price. Who cares? What I know is that I’m feeling pressured to do things that are not in my best interest, and I’m ready to lash back.

What is our recourse at this point? Well, we’ve offered them $3k instead of $10k, and that’s as much as we’re willing to offer. They’re getting all of our appliances basically for free, they’re getting the remainder of our lawn care contract for nothing, they’re getting the best freaking deal on a Cape Cod in the Borough of Downingtown that anyone will ever make, and they’ll be ripping us off to the tune of $3000. If they don’t take this last offer soon, then the house goes back on the market. I’m thinking that might happen later today or tomorrow if we don’t hear a positive response. We’ll end up getting a second loan to cover the swing loan that we wouldn’t be able to pay back until the house is sold. Hopefully our lender will be sympathetic. She’ll make out either way, really.

At this point, all I’m worried about is affording the new house on Tuesday. Assuming we can get through that, we can wait out the sale on the old house.

I’ve got to keep myself busy or I’ll be calling the realtor every few minutes either looking for a response or telling her, “I’m done waiting, put the house back on the market.”