[Rhodes22-list] Mother of All Scams

[brad haslett]

Talking about e-bay scams reminded me of this horror
story.  This is pretty long so if you have something
important to do, or even if you don't, you should
probably hit delete now and have a nice day.

MOTHER OF ALL SCAMS

It's been a few years now so finally I can tell this
story without wanting to blow something up.  After I
sold my farm outside Nashville I purchased a small
home in Memphis for a "crash pad" and tax home.  The
idea was to spend most of my time on a sailboat in San
Diego (you can get slip space for $325/month five
minutes walk from the SAN terminal). The short version
of an even longer story is I met a Chinese co-worker
on one of my flights to SAN, and before long, we were
married and moving to the suburbs.  I still got the
sailboat, just not in California.

I put the little house on the market with a real
estate agent in the neighborhood that we had become
close friends with.  We got an early extremely
low-ball offer from another real estate agent and I
didn't even bother to counter.  After six months I
told my agent that if the house didn't sell by the
next weekend I was taking it off the market and
renting it and the garage apartment behind it out. 
The same agent that had earlier made the low-ball
offer came back with a more realistic one but with a
gazillion conditions, one being that I secure
permission to build on the extra lot associated with
the property.  I countered with absolutely no
conditions other that financing and stated vehemently
I wasn't interested in doing any legwork for a buyer. 
At that point I really didn't care whether it sold or
not.  The buyer wanted to delay closing for four
months so she could sell her home and I agreed after
raising the earnest money deposit to $2000.  A week
before closing she asked to re-finish the floors and
start moving in, which she did.  The day before
scheduled closing she called my agent to say she
couldn't get financing and wanted her earnest money
back. She also accused us of fraudently
misrepresenting the extra lot as a buildable lot. I
told her to go pound sand.  Then her boss called, (her
broker), and asked for the earnest money AND
re-imbursement for re-finishing the floors.  I told
him to go pound sand, and suggested an oriface where
he could deposit the contract.

A month later I got sued for the earnest money, the
floor re-finishing, the closing costs on the house she
sold, the closing costs on the house she bought, and
treble the damages under the Tennessee Consumer
Protection act for a total of $32,000+.  They also had
a hearing set to freeze my assets and my agents assets
for $200,000 for possible punitive damages.

By co-incidence, my agent and I used the same attorney
(my agent's husband was a tax attorney and went to law
school with my attorney).  He advised us to give the
earnest money back and settle out of court, it just
wasn't worth the effort and risk.  WHAT RISK?, I
asked.  He explained that he'd seen some pretty goofy
things happen over the years and "you never know". 
While waiting for the court date I went to the Shelby
County codes department and asked for a letter stating
my extra lot was available for building.  My records
"got lost" for three weeks.  We settled out of court
for $2000 and a few weeks later my building permission
request "got found".  I filed a complaint with the
Tennessee Real Estate Commission against the
agent/buyer and her broker and after six months they
threw the case out for insufficient evidence. What
really happened was the buyer found another property
she wanted and backed out of buying mine.  From the
time she defaulted on my contract until she bought,
financed, and moved in the other property was three
weeks.

The happy ending to all this is that a builder friend
of mine and I built a spec home on the extra lot a
year later.  I made enough money on the home to fund
my daughters 529 plan and pay for her college to any
school in the country when she was only one year old. 
I still have the house which I rent to fellow pilots
as a "crash pad" and the garage apartment to a
professor at the U of M.  Now I don't have to mow the
extra lot or pay taxes on it.  Nothing suprises me
anymore but I learned this:  make an earnest money
deposit either one dollar or $100,000.  Anything in
between isn't worth the hassle.

The next time I sell real-estate I'm calling Bill
Effros!

Brad Haslett
"CoraShen"






		
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