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On the House
On the House: Easy buy that just unraveled
It has been a couple weeks since Daniel and Lori Meyers closed on their house in West Grove, long enough to lessen Daniel's anger over how the transaction played out.
Convinced that they could sell their West Chester townhouse quickly, and lured by the low interest rate they could get with their good credit, the Meyerses began looking for a single house.
"We figured that with interest rates so low, a lot of first-time buyers are looking for townhouses," Daniel Meyers said.
They were right. In about five weeks, Libby and Lynn Ayers of Re/Max Town & Country in West Chester had a buyer. Then the Ayerses, mother and daughter, began helping the couple look for a new home.
In early June, the Meyerses found a house in West Grove. The only fly in the ointment was that the house had gone to sheriff's foreclosure sale in May and was owned by Freddie Mac.
"It was really dirty, but it had been vacant for a year and half," Daniel Meyers said. "But it was cleaned up, and the home inspection only picked up a couple of things, so we were really lucky."
The house was listed for $309,000. They offered $305,000, and it was accepted in a couple of days, with Freddie Mac agreeing to a 3 percent seller assist. What's more, the house appraised at $358,000. The original owners had paid $318,000 three years ago and added $68,000 in upgrades.
"We knew we were getting a great deal," Meyers said.
The couple locked in a 5.8 percent fixed-rate mortgage. Closing was scheduled July 25, so they set the settlement for their townhouse July 27.
That's when things began to unravel, and, as easy as it would be to blame Freddie Mac and the Washington bureaucracy, the problem lay elsewhere.
"One of the difficulties we're finding is that we have to deal with a variety of local laws and practices that often run contrary to ours," said Freddie Mac spokesman Brad German.
In this case, the problem was that it took Chester County almost three months to record the deed for the sheriff's sale, required before the Meyerses could close on the house. That didn't happen until Aug. 13.
"We had to go through with our closing on July 27, meaning that we moved in with my in-laws for a month and had to pay to move twice and to have most of our possessions stored," Daniel Meyers said.
Less than 24 hours before the new Aug. 20 closing date, the lender said it wouldn't accept the seller assist, which meant the couple had to come up with $5,000 more in closing costs, plus the $64,000 they were bringing to settlement. "We didn't have it," he said.
Lynn Ayers said lenders weren't showing seller assists on HUD-required settlement documents, "shifting them to the closing costs on the seller's side of the sheet."
"The Meyerses didn't have enough closing costs to get the full assist," she said. Still, the problem was ironed out, and Daniel, Lori, and 17-month-old Drew moved in soon after.
"These transactions seem to involve a lot more paper-shuffling these days," Ayers said. "It means that buyers like the Meyerses have to do a lot more waiting."
Inquirer real estate writer Alan J. Heavens is the author of "Remodeling on the Money" (Kaplan Publishing). His home-improvement columns appear Fridays in Home & Design. Contact him
at 215-854-2472 or aheavens@phillynews.com.
