DAMMIT

"Dammit."  When I'm really mad or upset I say 'Dammit.'  If things are going ok I just cuss a lot.  And I said "Dammit" when Marion said "Here's the closing estimate from the broker."

If you scroll down a few posts you will find a series on how I had to foreclose on a house, re-do it with Cynthia the ex-con doing most of the work (and doing a great job by the way), and then putting a sign up in the front yard.  One day Marion with daughter and granddaughter in tow show up, take a look around, offer full price and give me a check for $500.  So far so good but don't get a real good feeling about Marion et al., but that's ok because Cynthia still has work to do and if the deal falls through we are no worse off, I thought.  And Patricia said she had been preapproved by Wells Fargo.  Great.

Met with Patricia and she has a written agreement that says basically the house would be in good working order at close, this painted, that painted, fix a small crack in a window, and split the closing costs.  I crossed out a few things and signed it.  A little voice was nagging, "Hey, stupid, how about those closing costs?"  To little voice, "Well, I just closed on another house and they were, not counting realtor fees, about $1,400 and in this case there are no realtor fees, so get lost, little voice."  Sarcastic comeback, "OK but I'd check it out." 

Sat for a day, little voice bugging me, and called Marion and asked her to have the banker call me.  The 'banker' called and said the closing cost estimate wasn't ready yet.  I told her I had just closed on another house and assumed the closing costs would be similar and 'normal and customary.'  'Normal and customary' has no legal weight, I don't think, but it means basically that there won't be any curveballs at the last minute and that all deals look basically the same.  "No problem." says the 'banker.'

A couple of days later I get a call from Marion wanting to meet to review the closing costs.  I'm starting to realize that Marion is not stupid, just wants to get Patricia and granddaughter out of her hair and on their own.  We agree to meet at the Dixie Cafe.  Never been in the Dixie Cafe but a rapidly disappearing part of Americana with a long counter, stools, booths and a waitress that said "Howdy."  We exchanged Howdys and got down to work and Marion produced the statement from the 'broker.'  I said, "I thought Patricia was approved by Wells Fargo?"  Turns out Patricia had gone to a broker who was going to sell the loan to Wells Fargo.  "Who's the broker?"  I asked.  "Deanna."  "Deanna what?" "I don't know." 

Great.  All I know is that brokers add a layer of complexity and, more importantly, a layer of cost to any transaction.  "And how did Patricia find Deanna?"  I asked.  "She's one of those low down, no down brokers."  Getting better and better.  There is no free lunch and if you go low down you ( and in this case me) are going to pay FEES, lots of them.  Loan origination fees, private mortage insurance fees, broker fees, lawyers fees, administrative fees, inspection fees, termite fees.  A second 'Dammit.' 

Plunging ahead, Marion handed over the closing estimate.  These look like a long addition problem with all the items listed above and added up to $5,008 which my share was $2,504.  Ouch.  Third 'Dammit.'  Marion wasn't too happy about having to cough up that amount either.  Got Deanna on the phone.  I said, she said.

"This is too high, I thought you said it would be normal and customary."  "It is normal and customary."  "I closed on a house last week and paid $1,400."  "Was it FHA?" "No."  "This is."  "So what?"  "FHA is more expensive."  "Why?"  "They just are with FHA."

Never much of a fan of the "They just are..." school of explanations but saw I wasn't going anywhere with Deanna.  She was hiding behind the FHA and wouldn't come out.  Deanna then suggested upping the price of the house to cover the closing costs.  I didn't understand that and hung up.

Thought a minute and asked Marion how much she was willing to pay in closing costs.  "No more than $2,000."  I was willing to do the same just to get this nightmare over with.  So I decided to stick it to Patricia who started the whole thing by going to a broker instead of a bank. 

Called Deanna and said raise the selling price by $1,000 and reduce the closing costs shares from $2,500 to $2,000.  Unfair to Patricia?  Not really.  An extra $1,000 spread over 30 years is $12 a month.  So we are supposed to close today but I don't think it will happen.

And the winner?  Not me.  I only got the closing costs down to $2,000 which is still $600 over what I paid on the other house.  Not Marion either.  Or Patricia either.  The winner(?) is Deanna since she gets a bigger commission on the increased sales price.

Bitter?  Not really.  I'm just glad I don't have to be a broker for a living. 

Moral to the story and nothing new here--if it sounds to good to be true, it probably is.