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Mayhem! Horror stories of house building and buying

From phony contractors to lying real estate agents, home building and buying is about a lot more than just location.
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Fake architect charges for worthless blueprints
We wanted to build a log home. We searched on the Web and commissioned an architect who specialized in building log homes. He had a legitimate-looking license, degrees, credentials and everything. We met with him and drove around and looked at log homes he had designed. He drew up some blueprints for us. They were $600 down and $600 upon delivery. We thought he was so nice to personally visit us and meet us at our home instead of his office.

When we got the blueprints we went to a general contractor to start building the home. There we found out that the architect was just "some guy with CAD software" who had no idea of how to do blueprints. The ones we had were completely useless. We tried to get our money back, but this person had since canceled his phone number and his "office" did not exist. We knocked on the doors of a couple homes he had claimed were "his" on the tour, and discovered that the owners had never heard of this person.

Haunted by house's past
My husband and I were looking for our first house, and our Realtor showed us a cute two-bedroom we liked. Because the real estate market was so "hot" at the time, our Realtor said that if we really wanted to make sure we got the house, we should offer more than asking price. The house was listed at $199,000. We offered $207,000. We got the house and proceeded with inspections, etc. At one point our Realtor explained to us that the owner had passed away and the son was selling the property. "The old guy took a nap in the yard and just didn't wake up," the Realtor told us.

The first day we moved in, my husband pulled out the old carpets and dumped them at the side yard garbage cans where our first neighborly encounter happened. She expressed surprise that the house sold so quickly. She said, "I'm surprised it sold so fast, considering ...." She paused and started again, "They did tell you what happened, didn't they?"

My husband said, "Tell us what?"

She said, "Oh you shouldn't tell your wife this, but the old owner who lived here hanged himself from the front yard tree."

We were furious that we had been lied to and, at the very least, upset that this information, which we believe impacted the value of the property, was withheld from us.

To top it off, the seller was a real estate lawyer. You would expect him, of all people, to know that information like this should be disclosed.

We lost our house
We sold our house in Florida a few months after we arrived in Pennsylvania. We sold it through the same real estate agent who had sold the house to us. A year later, we found a home we wanted to buy. Everything was going well and we were all set to secure a mortgage, so we began the process.

I received a letter from the mortgage company. It couldn't give us a mortgage because we were in foreclosure with our old house.

It seems our agent in Florida had sold our house by letting the buyer assume our mortgage. She didn't even have to qualify. Our name was still on the title, so we were responsible! It took us 10 years to become homeowners again. Don't ever agree to something you don't understand 100 percent.

Construction loan horror
We were attempting to obtain a construction loan. We supplied our initial paperwork to our loan officer. We wanted to place a used, single-wide modular home that we owned on 23 acres. After pulling our credit, he assured us that he could fund the loan.

Months later, our loan officer told us that there was a change in Fannie Mae and Freddie Mac rules. They now wouldn't fund single-wide mobile homes, so to complete the loan we would have to find a new, double-wide mobile home. We quickly found a modular home that fit the needs of the lender and continued with the process.

Our loan officer then referred us to the construction loan department to complete the process. That's when we were told that they would not even do a construction loan on any property larger than 10 acres.

Two weeks later, I received a bill for the two appraisals that were done.

Mortgage strong-arming
When I was rehabbing turn-of-the-century houses two years ago, the mortgage broker I depended on took advantage of me, knowing I had a payroll to meet. Because he assured me that a loan would close "next week," I went ahead with work on properties.

When "next week" didn't bring proceeds from the mortgage loan, I was hard pressed to pay the workers. By the time the broker did deliver the loan, I was not in a position to walk away from it. At the closing, the settlement officer handed me an agreement to sign that doubled the broker's fee for arranging the loan.

Tricked instead of treated by a real estate agent
I wanted to take advantage of the rock-bottom interest rates of this past summer and went scouting for homes. I met a real estate agent who offered to help me find my dream home. I had to really pinch and scrape to get my down-payment money. I was a first time-home buyer. I was preapproved for a conventional mortgage but preferred an FHA loan. My agent knew all of this.

When I finally had found a home, my agent took my offer to the sellers and their agent. Without my consent, my real estate agent offered to go with a conventional mortgage and waived my right to have a home inspection. When I found out, I demanded she get things straightened out. She said it was too late -- she and the sellers had already signed the acceptance agreement and taken my earnest deposit check of $1,500.

After the final closing, I discovered multiple breaches in the disclosure, including water leakage in the basement, garage structure damage, roof damage. Also, the fireplace was deemed unfit for any fires by a contractor and had to be removed and replaced.

Worthless float-down option
I just closed on a mortgage refinance loan last week. I locked about six weeks ago, choosing to take the float-down option. During that five-week period I followed the going rate on a daily basis. The trend was a steady decline. Sure, there were a few bumps, but the net effect was a much lower rate than five weeks prior. So I was very surprised when my closing paperwork still stated the original interest rate for my loan. I called my loan officer and was informed that despite four or five weeks of declining interest rates, this particular lender's rates remained unchanged and so my float-down option was fruitless.

Asked to lie about income
I went through a building company to buy a new home. I put $3,000 down as a deposit. I had been pre-qualified for a mortgage through its company.

When the mortgage company was putting me through final approval, I was told I did not make enough money according to my profit-and-loss statements for that year. They suggested ("wink-wink") I redo them to make it appear my business was more profitable.

I refused to doctor my financial records and was denied the mortgage. The builder then called to say I would not be refunded my $3,000 due to the fact the construction had begun and the mortgage was denied. I tried to get help to reclaim my money, but was unsuccessful. The home was resold to a new buyer and the company made a killing.

-- Posted: Oct. 23, 2003




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