Over the past year, it seems every week we receive at least one mail solicitation asking us to sell our Aspen Springs property. These offers come from all over the country — but none from Pagosa Springs.
Whenever we receive one, I look up the address of the “Buyer” on Google Earth. Some are in storage-garage-type business complexes. A couple have been ‘pack and ship’ stores. One was a small strip mall that had a Chinese restaurant, a nail salon, and a massage establishment. Then there are the post office boxes. None have been realtors or had a sign reflecting a land office.
The price offered varies between a fraction of what we paid, to multiple times what we paid. Aside from the price differences these offers all have similarities, the most obvious of which is the format — a one page “cover letter”, together with a one page “Purchase Agreement” we must sign and return by certain date.
Being curious about the format, I asked a realtor acquaintance, who told me there are courses which teach how to get rich buying and selling land, and that those courses provide the forms. That explains the similarity of the format from diverse geographically located buyers.
I googled “How to get rich buying/selling land” and found many sites. A common thread is that you can earn a lot, with very little investment of your own money — while sitting on your ass at home. Most sites offer a training class.
We have successfully bought/sold both vacant land and homes, so we aren’t novices. As a lawyer, I know a thing or two about real estate transactions. Even so, we’ve always utilized realtors, and licensed escrow agents. Doing so precludes a lot of potential problems that can be very expensive to fix later — if they can be fixed at all.
I’m not saying these “buyers” are on par with the internet Nigerian prince who wants me to help him get his money out of his country. But if not, the buyers shouldn’t wave so many red flags in their offers.
The purchase agreements all have similar language, though some are more detailed than others. The detailed ones are the most problematic from a sellers perspective. Here are some issues I have with the buyers who are pestering us.
First, and foremost, we have never bought or sold a property where the buyer didn’t put some money down at the time the contract for sale was signed. You want to buy our property; put some money on the table when we sign the contract.
That “deposit”, “earnest money”, whatever you want to call it, goes into escrow until closing. If you’re buying our property, that deposit is non-refundable, and forfeited to us if, through no fault of ours, the buyer doesn’t close for the offered price by the specified closing date. That’s the vig for our property being off the market while the contract was pending.
Not one of the offers to buy we’ve received even hinted at, let alone tendered, any deposit. That tells us everything we need to know about the financial stability of the “buyers”.
One agreement would have bound us to accept payment by “cashier’s check, money order, or credit card”! Say what? You want to buy our land using a credit card? Got cash-flow issues, do ya?
Some of the purchase agreements provide that at closing we will receive the “purchase price” — which sounds distinct from the “offer” price. That can be a problem if the agreement allows the buyer to arbitrarily decide the property “value”, and “adjust” the purchase price downward accordingly, after the agreement has been signed. .
Well, excuse us! If you didn’t know the value of our property before making the offer, why did you make it? We can only assume the offer wasn’t in good faith to begin with, and was just a bait and switch to get us to sign a binding contract — which allows them to then lowball the “purchase” price on the grounds that they don’t think the land is worth what they initially offered.
All the offers include dates by which we must sign and return the agreement, but some have no dates by which the deal must be closed. In that circumstance, if we sign the agreement the buyer can essentially wait as long as they choose to close — say, until they can flip the land for more than they’re paying us — while we can’t sell to anyone else because our land is then encumbered by the agreement.
There are sometimes one-sided “cancellation” clauses in the agreement. Usually they provide that the buyer can cancel, without any provision that we can cancel. Again, we are then bound (and our property off the market) until the buyer decides to close the deal… at whatever price they decide to give us.
It’s customary in a real estate transaction for the seller to select a closing agent — often a title company. Some agreements we received provide the closing will be “done by a Notary”. Worse, some of them provide the buyer will use a “third party closing agent”.
Oh, OK! A “buyer” we’ve never heard of before the offer, whose “business” address is a post office box in some other state, will select a closing agent (of god only knows what relationship to the buyer) to whom we’re supposed to entrust the sale of our land?.
The cover letter premiss to all these offers for our land is that the buyers will take it off our hands for quick cash. They are doing us a favor by relieving us of the burden of paying the property taxes, or having to pay a realtor’s commission – and they will pay all the closing costs.
How could we ever pass up such a great deal?. In the words of Vito Corleone, “Why do I deserve this … generosity?”
Those are examples of the red flags I’ve found with just a cursory reading of the offers we’ve received.
I’m sure I could find more, but those are enough.
I’d rather deal with the Nigerian prince.
Gary Beatty lives between Florida and Pagosa Springs. He retired after 30 years as a prosecutor for the State of Florida, has a doctorate in law, is Board Certified in Criminal Trial law by the Florida Supreme Court, and is now a law professor.