Sami
If you read below, you will see that the issue was resolved, and they are scheduled to close Nov 20.

If the price is good then what is $ 2,000?? Especially if the property is being sold somewhere around 60-65% of 2005 prices. By the way what price range is this?

Cyprissa...hello again

So glad to hear things are working out for you........good luck with your closing - on the 5th!!!
I am glad you were able to vent here ( !!), and that our repsonses were helpful...........

Best wishes to you in your new home!
Debbie Rose
Prudential NJ Properties

Thanks for the update.

A few quick observations: You say: " I think what sort of put me over the edge on this is that the house is a flip and while I think we are paying a fair price, they are surely making a ton of money!" That's understandable, but you have to not worry about that. It doesn't matter whether they're "making a ton of money." The question is whether you're getting a good deal.

I know a lot of investors, and a typical "flip" deal can work like this. (These numbers, rounded off, are from a real deal in the DC area last month.) An investor (in this case a "wholesaler") puts a house under contract. The house, when fixed up, will sell for $400,000. The wholesaler puts the house under contract for $200,000. She assigns the contract to a rehabber for $20,000. So, there the wholesaler made $20,000 on the deal and she didn't even have to buy the house.

The rehabber buys the house for $220,000 using a hard money lender. The hard money lender also funds the rehab--let's say $30,000. The hard money lender charges 5 points and 15% interest. So the hard money lender will make $15,000 in points and maybe $8,000 in interest. The hard money lender may be borrowing the money at 3%-5% interest. So the hard money lender makes "a ton of money."

The rehabber has the place rehabbed in two months. The cost is $30,000. The construction company makes some money--not a huge amount, but some.

The rehabber has paid $250,000 for the house and rehab and $23,000 to the hard money lender. That's $273,000. The rehabber lists it with a Realtor for $380,000. Why not $400,000? The rehabber wants a quick sale. Remember, she's paying 15% to the hard money lender. So her selling costs with the Realtor will be around $24,000, plus any seller subsidy, closing costs, etc. Let's say $27,000. That brings the rehabber's investment to $300,000. That means the rehabber will make--if everything goes according to plan--a bit less than $80,000. Lots of times things don't go according to plan. But the deal I'm describing was pretty successful.

So, yes, the rehabber got a bunch of money, but took a lot of risk. The contractor made some money. The hard money lender made a nice amount of money. The wholesaler made $20,000 with no investment. And the buyer got a fully rehabbed home for $20,000 under market.

In your specific case, now you may be able to understand why the rehabber--who was probably paying a mortgage at 15% and possibly higher--wanted a quick close. And understand, too, that hard money is usually lent for only 6 months. If the rehab, in your case, had gone, let's say, 4-5 months, then the rehabber was probably facing some substantial fees to extend the hard money past the 6 month date.

So, again, your reaction is fully understandable. But just recognize there was a lot going on behind the scenes and the bottom line is that you probably got an extremely good deal on your purchase.

Hope that helps.

Thanks everyone! I think I needed to vent. So, we agreed to do another $1K on price and they accepted so we thought we were all lined up to close Nov. 20th. Well, after all that drama our actual loan officer came back about a week ago and said, "hey, I'm not that busy...we can close on the 5th if you want to get into the house sooner." I had to stop myself from having a fit of laughter...

It looks like we are closing on the 5th and if that happens we get our 5K back. I think what sort of put me over the edge on this is that the house is a flip and while I think we are paying a fair price, they are surely making a ton of money!

Anyway, I am happy and honestly the extra $1K was really not a big deal. I was just annoyed because the closing date was out of our control and I didn't like feeling penalized by that.

OK..so............Cyprissa.....tell us what happened.

Did you buy the home??

Hi Cyprissa

No, you're not nuts (feel better now?) ! Emotions run high when trying to buy (or sell) a home. Most sellers feel especially emotional these days.

I am sure one part of you wants to just say NO...and see how that poker hand will play out.. It is an option.
However, you can always take a deep breath, and just make the deal happen.....take the high road, and know that maybe thse sellers are feeling the strain and pinch of this market.

if you still feel upset, you can always offer to split the difference, and agree to $1000...........people often want to feel there was some compromise involved when negotiating.

It's up to you......................if the house is only on the market for 9 days, just don't play around and lose it to someone else for a relatively small amount of money.

Fell better now? I hope so!

Good luck, and please let us know what happens.

Best wishes...
Debbie Rose
Prudential NJ Properties
email: Debbie.Rose@PrudentialNewjersey.com

Hi Cyprissa,

Is the market is hot right now? It depends on the situation of the sellers I think
the reason to close early because he might behind on the mortgage payment.
That is why asking you pay additional $ 2,000. explain to your agent and sellers
agent that your loan can not be close sooner.

Irena,

Thanks for the support....I do appreciate it! We have an agent and he's been supportive of whatever we want to do. I think what's frustrating is that they want to close in less than 30 days, which with all the first time buyers and refi's going on is next to impossible in our area and I just hate to feel penalized for that. Plus, this place has only been on the market for 9 days, so it's not like it's been languishing for months. It's just frustrating!

Cyprissa

Hi Cyprissa,
I can understand how you feel, I would be ticked off too. I also understand that you feel the need to vent and looking for support. You've got it from me, that's for sure.

Who is represneting you in this deal? do you have an agent or an attorney working for you?