I'm in California, about to close on a home. There was an auction held before the transaction, which eventually just funneled into a short sale. Without bogging this down with details about how adversarial the past 6 months has been, suffice it to say that the auction company, and the loosely related (I believe both children companies of the same larger entity) seller's agent have been terrible at making this sale go through.
My question: I had to sign a document which said "Buyer agrees to pay 5% premium." But it says little about what it's 5% of. I had naturally assumed it would be 5% of the normal seller's fee (of ~3%, so 0.15% of purchase price) and now I'm hearing some people interpret it otherwise.
Nowhere in the escrow paperwork is this fee mentioned, it was just a stand alone document. The website from the auction said the following:
As best as my agent and other people can put it together, I should be able to close the house, and deal with this fee as a separate debt.BUYER'S PREMIUM: A BUYERS PREMIUM OF 5% WILL BE CHARGED TO THE BUYER AS A CLOSING COST, DUE AND PAYABLE AT CLOSE OF ESCROW. THIS FEE IS PAID DIRECTLY TO EXPERT HOME SOLUTIONS, INC. AND IS NOT INCLUDED IN THE PURCHASE PRICE.
DEPOSITS: Bidder acknowledges that a security deposit of $2,500.00 is required within 48 hours upon being declared the winning bidder; this money will be deposited into Listing Brokers trust account until time of closing when it is transferred to escrow.
The document I signed says:
Does anyone have any insight? I've tried to even FIND a lawyer who's dealt with this before, and so far, have been unable to. Some people have "heard" of it, but I need a bit more to go on. I'm supposed to close tomorrow or the next day, and want to know what sized check to bring, and if there's anything I can do/say if they demand 5% of the purchase price instead of 5% of the seller's commission.Date (date)
Buyer(s) (My name)
Agree to pay (company name) Solutions, Inc. dba (same company name) Auctions International a 5% transaction fee for services rendered on the purchase of (adress)
This transaction fee is due and payable at close of escrow as a closing cost to (company name as above)
This fee does not constitute an agency relationship.
(Signed by me) (unsigned by company)
These guys have had some terrible paperwork all the way through (the owner saying there is not AC in the place when there is, etc)... I'd like for once for their incompetence to work for me instead of against me - my own agent could use a healthy tip, for instance. :-)
Thanks! Even if you just know someone I could call, I would be much indebted.