I bought my first house at 25 and it was the best decision ever. Sold it 3 years later for a 55k profit and the mortgage was cheaper than rent in the area. Literally no down side to buying a house if you qualify and have basic money handling skills. The female is the only thing that would sketch me out.
Couldn't have said it better! This guy and people like him, are STUPID beyond belief! No one should ever get married until 25 or 26 at the very least, and preferably even a bit later than that! The correct way to do it, would be to BUILD YOUR LIFE AND CAREER during your early to mid twenties, save up diligently during that time, get ALL your ducks in a row, AND THEN get married!! The idiots who don't follow this disciplined process, are the same ones you hear calling Dave with debt up to their eyeballs, and end up having all kinds of other issues as well! Raising a family in places like the US (and the west in general), can be extremely expensive and difficult! Most of these nutjobs have no clue what it takes! And then when things don't work out the way they thought it would, they simply throw their hands up and try to walk away! But as we all know it's not that simple, once you're "entangled" in that web!!
Exactly so I’m not sure what Mr. Ramsey is saying that you can’t do it sure now I have a closing and I’ve just found out some contradictory information that the housing market in the area that I’m in the house value from what I see anywhere from $20-$30,000 less than when I first meet the offer and I don’t think I’m gonna go through with it if this is true I’m trying to confirm this information appraisal was done about 45days ago
I’ve been around real estate agents my entire life and I’ve never heard of a contract where either party was allowed to back out a couple hours before closing.
I was a realtor for 30 yrs. Happens all the time. There a box the buyer agent can check. Under no circumstances can they lose there deposit. I do it on my own offers. Great way to tie up a property. The listing agent job to counter that clause.
The day before closing? Whenever we bought, there were always contingencies, for lawyer approval, inspection etc. Once you waive those you're locked in and if you no show the closing you'd lose the deposit for sure and be liable for damages.
Hello, I’m refinancing my house. Lower rate, from 30 years to 20 years. The closing is in 2 days. But, I want to keep 30 years, so that the monthly payments can be lower, since I’m a single mother working hard... I thought $350 can be used for something else. Please help
I don’t fully agree. Business is business if you have the right to back out and absolutely need to that’s your prerogative especially if the contract states it’s your right. If the sellers don’t like that they should have it void from the contract before signing. It’s not unethical if it’s in the agreement
@@brendasgirl90 a bad deal is any deal that you know up front will hurt you. The terms of the loan may be really good, but just not for them in the financial state they are in now. Someone else of better means can (and should) benefit from that purchase.
What issues? He has managed to have cash in the bank, shares investment and 401K. The cars are the only mistakes but sounds like they're within the Dave limit. His advice should have been sell the cars, drive hoopties and pay the house down in 4-5 years. Mortgage free both working by 25yo. He'd be singing the praises if someone in that exact situation called him.
Nah your never too young, three years ago I got married at 19, now I'm in my masters for psych and have bought a house (no kids yet). All you need to do is work those 60-70 hour work weeks for a couple years and your good to go.
Dave has a soft spot in his heart with real-estate. If this kid called up and told him that he bought a $30,000 car yesterday he would tell the kid to go back to the dealer and beg them to take it back. Not sure what the difference is here. If the kid can avoid making a huge mistake than he should.
Yep, I was thinking the same thing. Dave used to sell real estate and he owns a lot of real estate. If you want to get out of a house deal you can there's plenty of things in the contract. The inspection is usually the easiest thing but his time has come and gone on that.
Dave explains it pretty clearly starting at 4:55, but to help clarify your confusion: A dealership that takes a car back isn't encumbered or damaged the same way that a family is when someone reneges on a home sale contract, on closing day no less. The kid should avoid making a huge mistake, but he should have to pay the price for wasting everyone's time, money and resources, too. I'm willing to bet the contract contains language that would do just that.
Something tells me this kid is misinterpreting the clause in the contract that he think says he can just change his mind without reasonable cause, like problems with the house after the inspection
I agree to a point but again buyers have more options to back out of a deal than sellers. This is why reading a contract before signing is crucial. Yes it’s 4836 pages but it’ll save you a ton of stress and money. Most of all it’ll save your from a little jerks like him ruining your life
You will just lose the earnest money if you pull out. It’s your right to not purchase it. Nothing’s final until you sign the paperwork at the title company.
You're exactly right people have the 10 to 15 day inspection, To remedy if they find something wrong they can back out and keep their money but after that period They lose their deposit in all contracts
Just ask for about $50,000 of repairs. Do the repairs or return my $3k -- Easy Decision. This is why when I sell my house, it will be as-is -- do inspections before offering.
@@kd8opi @kd8poi Of course -- you ask for 20% of the homes cost in repairs during the inspection - You're buying a $200k house -- ask for a new furnace, roof, windows, replacement appliances, flooring to be replaced, toilets to be replaced, etc.. ---- They do not agree, earnest money is returned. That's how it works.
Buying a house in that price range is not going to be a make or break situation. Rent is going to be similar or more, but home ownership does require more discipline which is not something this guy has been great at up to this point, so provided he changes his ways he will be fine, if he continues his current behaviors he will almost for sure get into trouble.
Seller is required to have the home empty for the final walkthru , so these people have their life belongings on a truck somewhere and this guys gonna pull out the day before closing ? Dirtbag move
1/15/20....I ALWAYS sell my house 1st + have closing so I get my money...BUT my sales contract statrs that I have up to 30 days to live in/occupy my old house. That makes SURE that I have closed + have the money in my bank account. Then I go to closing & actually buy my next home & sign mtg papers. THAT gives me time to make any changes in my new home---paint or carpet or put fence up for my dog--- & move in when I am ready + before the 30 days is over.
He’s just a kid.. He’s just too young to be rushed into house and marriage. He’s right to be scared and want to pull out. Do feel bad for the sellers though
All of you saying he can back put have never been through a real estate transaction. There are agents, mortgage company, sellers, insurance companies, etc in on each deal. The buyer usually puts down a hefty earnest deposit that won’t be refunded if he backs out after contingencies have been met. It is not a simple walkaway.
Something tells me the realtor said "you can always back out" with out thinking he'd actually back out. Realtor was just trying to provide false comfort.
Poor guy.. I went through real estate school and got my license about a week after I turned 18. I was by far, the youngest person in the school but the lessons I learned are invaluable.
It depends on what state you live In. I live in Florida so for example, the school I went to is a pretty well known school called Gold Coast realty school, I forget exactly how much it is, but it was a few hundred for the 7 days course. As far as difficulty, that’s kind of subjective. You got to school 8 hours a day for 7 days straight and then I would come home and study for a couple more hours each day. There’s two exams, a preliminary exam called your “pre test” and then if you score high enough, you take the state board exam. You just have to get a 75(ish) or higher to pass. All that being said, I would caution you into rushing into real estate so young. Getting your license and starting out in real estate is an expensive process and you are your own boss, which means you are essentially starting a company even under the guidance of a brokerage company. It’s not impossible but you have to really make sure that’s what you wanna do. Lastly, contrary to popular belief, there’s a lot you don’t need a real estate license to do. You don’t need a real estate license to buy houses, sell houses you own, rent them out, flip them for a profit etc. it just depends on what your overall goals in real estate are.
They do not get paid , only commission , that is true market for this job. They do not need to lie , the house can tell it is condition from top to bottom. Inspection due , u know what is that. Case closed
This kid is the stuff a seller has nightmares about and what if they have a contract on another house. He should have thought about all this beforehand.
Did the inspector find anything wrong with the house? Sometimes if the inspector finds something wrong with the house, a buyer has a way out of a deal. If the house passed inspection with a good bill of health, This caller may not have a way out of the deal.
Sounds immature and way in over his head. I really dislike the fact that he has no remorse and laughed at the fact of screwing over the seller at the last minute.
Tigerkem Yeah; disgusting. My business works with young entrepreneurs who have come in to money, and we generally reject anyone under 25 for this exact reason. They have no life experience and think the world revolves around them.
The seller can find someone else to buy their house, the market is excellent for sellers rn. Plus if this is true, they were dumb (or desperate) enough to enter into a realestate contract with such an easy out. Better to not hurt yourself financially to help someone else financially.
Tigerkem ....thats where society is headed unfortunately. We have bought and sold various real estate properties, and one would be surprised at how many times the buyers agree to certain terms and then back out with no real reason. Recently we had a buyer that negotiated some improvements on the house, even though these particular items passed inspection by THEIR inspector. We agreed to make the improvements at a cost of $7,000. Afterward they simply backed out. Could we sue them....maybe, but its not an easy process and even more difficult to actualy get the money. Unbelievable
A lot of people don't. My mother once bought a house that the sellers didn't even own. It was a private sale, so obviously the title search that normally gets done wasn't done. The sellers were buying the house from somebody else and sold it to my mother before they had paid it off. It all turned out ok eventually; the sellers paid the house off on their end when my mom paid it off on hers. It was the goofiest thing I ever saw. I didn't even know about it until after she died and I was sorting through her papers. My hair absolutely stood on end.
If the contract actually says he could back out until the last day, he didn't "give his word to buy the house". When you sign a contract, you are promising to follow the language of the contract. If the contract says you can back out, then you aren't going back on your word.
I backed out of a contract for a new home before from the builder. They took my $5,000 deposit but that was something I was willing to lose cause I found a different home I liked even better. It's normal, many buyers back out before closing (maybe not on day of closing) but sometimes the banks won't give the mortgage to the buyer for various reasons. Even when I closed my first home, the bank was giving me a hard time asking for documents they should have asked long before closing. I can see how some people may be like, "I don't have that document, I can't close"
Lender agreement contingency is almost always written into the sales contract. Irony here is that once the lender gives you a clear to close, you cannot use the lender contingency opt out.
Whatever, Dave advises people to get out of bad deals all the time NOW he cares about what happens to the seller? No this kid should back out of this if he can't do it.
Sometimes it’s warranted. We found mold at the final walk thru… it’s a health and safety risk not disclosed by the seller and was not detected at the time of inspection.
DR is concerned the caller is breaking a promise, but it is a *conditional* promise (presuming caller is accurately describing K terms). If such a contractual condition allows for last minute cancellation (which is rare and must have been *negotiated*), that is the deal that was bargained for (and the risks assumed) by the parties. Hence, cancellation is not a breach but a permitted out-clause, just as if the contract was conditioned upon financing or inspection. If there is no such out-condition, then the caller would pay his penalty by forgoing part or all of his good-faith deposit, and the seller is duly compensated. Either way, there is no breach of honor, dishonesty, deceit, immorality, etc. by the caller. BTW, don't buy is when one is getting married or just before having one's first child--too many emotions and expectations. Like Dave says, wait a year (I've seen this several times especially with first time parents with the homing instinct, only to regret it about a year after purchase).
You want out of the contract before its signed? Don't sign. You just lose your deposit. . The earnest money and all of the costs incurred so far are typically on the buyer backing out this late. . They should clear the car debts before buying a house. If they don't have a plan to clear those they don't need another loan.
In our scenario the Inspector did not detect mold. We found mold at the final walk thru (after some rain). Pictures in the listing show a new post on the porch but old Google images show a moldy post. Also, seller did not satisfy his contractural agreement to remove metal sheds in the backyard. These sheds were present at the time of the walk-thru. We are heavily considering backing out after this seller was also doing everything possible to stall the sell.
I had someone back out of a closing on me .I got to keep their deposit and down payment .28 k in my pocket thank you. Did I feel bad no the people were not picky and thought they were smart.They were to cheap to hire an attorney for a realestate transaction.
Licensed realtor here weighing in on the situation. This is what I'm thinking is going on 1) his realtor has no idea what he or she is doing and is misleading him. 2) the realtor added language in the additional terms of the contract that allows the buyer to walk away at any time without penalty even after the inspection period and loan commitment. Still seems strange because I can't think of any sellar that would be dumb enough to sign a contract with that ridiculous contingency. I'd like to hear how this whole thing gets resolved. I would assume he's going to forfeit his deposit or incur some legal action. But then again you never know oh, he's in the Midwest and the sellers may have a kind heart.
First time I disagree with Dave. Get out if you can those people will be fine. They will find a buyer, meanwhile you avoid a mistake that will potrntially set you back financially for a very long time.
Being able to relate to this situation. It’s not that easy to purchase a house/home. Based off of my intuition that sounds or seems like closing cost and other fees may have caught them off guard and if your not prepared for all these expenses, still have a debt the house/home purchase will surely break or bust your budget. He is a successful young man though and will be successful hopefully going further with such great aspirations at a young age.
Buyers remorse is a real thing and that is why hey have you sign a contract. There is damage done when you back out of a contract and penalties can be collected.
@@theandrewhenderson Absolutely, but that is IF they have any skills at all. On the other hand, I do believe that character can be redeemed through growth and maturity but still, that's assuming they can do that too! Tough call
Its weird. He should have advised sell the cars, honour the contract, enjoy the house and pay it down in 4-5 years. They were sitting ok financially apart from car payments. In fact he was doing well age 20. Dave lost it coz all he could see was a contract. He was like a deer in headlights.
Yeah, not for any reason. He literally would have to come to closing and find out for some reason or another that he had not been fully approved for the loan. If that's not the case and he backs out he could be sued for specific performance and they can take his earnest money . I would love to see that contract.
Almost one year later I'm curious what happened after this call. I'm surprised to hear a realtor telling a prospective home buyer possibly an agent of the seller unless he's paying for a buyers agent which it doesn't sound like the kid is that he can back out right up until closing, realtors want to get paid.
He tells this guy he should be bound by his word, but dave also tells people all the time to offer settlements on credit card debt for pennies on the dollar. How is that different. The cc contract said the people would repay
Obviously many bad decisions were made buying a house, trying to back out the day before, and getting married at 20 is absolutely crazy. It’s ludicrous. I will give him credit though . It is extremely good to be able to make 40k a year at 20 years old that’s pretty impressive. Which is why is surprising that someone that smart being able to make 40k at 20 is making some bad decisions
This is not a legitimate call. There is no way a real estate purchase contract would allow a buyer to walk away without suffering some loss meaning losing the down payment. Possibly even being sued by the seller for breach of contract.
He’s not sure why are u saying he has to buy it ? Hes being honest, someone else will buy it. I don’t think ur that a good of a guide or come to person. Sad.
No. Contracts are just to state the terms. Contracts can be canceled. It's not someone giving one's word. Buyers and sellers should make sure each other is happy with the terms before making it final. Why wouldn't the seller be happy? If the house doesn't sell to him, sell it to some one else. It's not the end of the world for the seller, but it may be for the buyer.
You have all these contingencies and you will never get an accepted offer on a house. Your offer will be sent to the bottom of the pile guaranteed, Been in the real estate business for 30 years...
Seriously, getting into a huge financial situation when he is not comfortable or prepared to do so? If the contract says he can break it THAT'S PART OF THE CONTRACT TOO! If the seller signed it they knew and agreed to that no moral problem.
Meanwhile, politicians and the ultra wealthy break their word all the time and fail upward. People are kept down because they value ethics over playing the game.
Buy the house. Jeez, $120K is doable on their combined $60K. She's got through her study on very little debt and he has 401K, investment shares and emergency savings. Their cars values also sound to be within Dave's rules. Their only real mistake is the car finance but even that is manageable. He was harsh coz he was stumped. The house actually sounds a great start to marriage and a target to get paid down.
B C that’s not accurate. In theory, selling a house is not that expensive, especially if you private sell it. Minus taxes there wouldn’t really be any other expenses because that would be covered by the buyer. Additionally, I’d rather be $15k in debt than have an entire mortgage I can’t afford risking foreclosure or bankruptcy.
@@blakeb4583 he would still be out money genius. Hiring a realtor, appraisal fees, etc etc. that is very dumb. Maybe figure out what you’re talking about before you comment next time.
no you are confusing illegal and unethical. the contract just covers the legal matters not the ethical more so. people seem to think because something is legal or contractual ..it is ethical
I got married at 21 years old. Still together with my wife. I love her since day one. We’re doing very well. 7 years of marriage and still going strong. I think it just depends on the level of maturity these two are
Why does Dave get upset when this guy wants to renege on a deal but doesn't get upset when people renege on their deal with credit card companies? You signed a contract with the credit card company to pay them as well. In this case, if what the guy is saying is true, it's actually in the contract he can back out. Seems like a contradiction.
I am guessing yes. But I can't judge the guy because I have been hypocrite in some cases and probably most of us have. But you are right cc or any other loan should be paid off because we made a commitment to pay it off.
Yes, Dave is very self-serving. He doesn't want anyone purchasing a home unless they pay all of it in cash, which is practically impossible until you are near the eclipse of retirement, even if you make six figure incomes in most metro areas. He prefers people to rent because he personally owns thousands of residential properties and represents rental associations. Just trying to keep pumping up people to rent as the way to build equity [for himself and other landlords like him]. This is validated when you hear callers call in saying their income is good due to rental properties they hold, he high fives them on the air.
Change the closing date, it’s the kiss of death to the real estate contract. Hire a real estate lawyer to help you. Realtors set the closing date and assume (tell you) that certain things are not negotiable.
Do the States not allow the potential buyer a few days consideration breathing space? We have a week to reconsider as part of our national legislation.... this is because we realize that buying a house is a very emotional and is often made on the spur of the moment. What we do have in South Africa though is that all house purchase contracts have to actually STATE the breathing room clause.
Unlikely they would sue on a 134k home. However, he'd lose his entire earnest deposit. Additionally, if he didn't already pay out of pocket for the appraisal or home inspection, he'd be legally billed for that as well. Possible more financial penalties would be incurred, such as paying the realtor's fees regardless of outcome, but generally speaking the ED and costs incurred items would be of minimum amount completely forfeited.
I think it would be worth a call to the seller let them know what's on your mind and possibly offer them a couple thousand buck for the headache, assure them that you are a man of your word and you will go through with the transaction as promised but you just wanted to give them a call and see if there wasn't a possibility of working out and alternate solution
5 years later, interestingly, if he did the honorable thing and purchased it, he probably has a $400k home for the price of $134k, haha. WOW. But he was only 20, which yes, is an adult, but a young and less wise one.
I'd say it's OK to back up (assuming what this guy says is accurate). The contract says it that way for a reason --- the sellers chose to go into a cancellable contract because they believe they're getting something in return, i.e., more potential buyers.
If you can back out up until closing for any random reason, what's the point of the contract then? Something doesn't sound right. 🙃 Dave: "okay so um let's pretend that this is true 🙄 ..." 😂 1:49
When I moved to texas I sold my house in Reno they signed the contract the she was a counselor from the college she was trying to get them to back down I had put in an a.c. system and all new apliances so we all got together in one room with the counselor and she was this close to get sued and so where the people that were going to buy house so they bought the house and I moved best thing I could have ever do cause now my house in texas is paid off
@@MikeHoncho610 Did you actually watch the video? The caller said that the contract says he can back out anytime before the closing, and Dave said that it would still be unethical for him to back out of the deal before closing.
@@rreagan007 with undisclosed reason? Yes it is unethical that’s correct. If he say, couldn’t get financing approved, the seller wasn’t fixing things based on inspection report, etc etc. then yes, 100 percent good reason to back out. But because he just changed his mind? It’s legal in this case but ethical…not so much. And stop liking your own comments it’s weird.
@@MikeHoncho610 You're actually saying that if the contract says you can back out for any reason before a certain date, and you exercise your right to back out before that date, that that is unethical somehow?
Unless you have your careers figured out, don’t buy a house which will keep you stuck in that area.
Arvind Talukdar Amen!!
Arvind Talukdar yes! This is one of the best pieces of advice
Arvind Talukdar YES!!!
He just advised him to buy the house lol
I bought my first house at 25 and it was the best decision ever. Sold it 3 years later for a 55k profit and the mortgage was cheaper than rent in the area. Literally no down side to buying a house if you qualify and have basic money handling skills. The female is the only thing that would sketch me out.
20 years old, getting married and about to buy a house. Get ready for the headaches and stress.
Yeah! Crazy!
At least he is getting a early start on paying for his exwifes house
darte coates and don't forget they have room mates moving in with them , their names are Stupid, Dumb and Regretful.!!!!!
@@waynekerr2472 LOL, sad but true.
Couldn't have said it better! This guy and people like him, are STUPID beyond belief! No one should ever get married until 25 or 26 at the very least, and preferably even a bit later than that! The correct way to do it, would be to BUILD YOUR LIFE AND CAREER during your early to mid twenties, save up diligently during that time, get ALL your ducks in a row, AND THEN get married!!
The idiots who don't follow this disciplined process, are the same ones you hear calling Dave with debt up to their eyeballs, and end up having all kinds of other issues as well! Raising a family in places like the US (and the west in general), can be extremely expensive and difficult! Most of these nutjobs have no clue what it takes! And then when things don't work out the way they thought it would, they simply throw their hands up and try to walk away! But as we all know it's not that simple, once you're "entangled" in that web!!
I backed out day before closing it’s better to back out lose earnest rather than losing 500k
Exactly so I’m not sure what Mr. Ramsey is saying that you can’t do it sure now I have a closing and I’ve just found out some contradictory information that the housing market in the area that I’m in the house value from what I see anywhere from $20-$30,000 less than when I first meet the offer and I don’t think I’m gonna go through with it if this is true I’m trying to confirm this information appraisal was done about 45days ago
If your comfortable being unethical and a bad person to do business with...so be it. Thats on you.
@@steveludwig4200if it helps me idc what random people I’ll never see again tbink lol
I’ve been around real estate agents my entire life and I’ve never heard of a contract where either party was allowed to back out a couple hours before closing.
Been around and writing contracts are not the same.
there is a 3 day period where you ARE allowed by the bank to back out of the deal! its in fine print!
@@Vera-dg3hf You're confusing the 3-day rescission period for a MORTGAGE which is not the actual house purchase.
Not without penalties
If he's got an "out" clause in the contract he is 100% morally and ethically above board in utilizing it....period.
I was a realtor for 30 yrs.
Happens all the time.
There a box the buyer agent can check. Under no circumstances can they lose there deposit. I do it on my own offers. Great way to tie up a property. The listing agent job to counter that clause.
The day before closing? Whenever we bought, there were always contingencies, for lawyer approval, inspection etc. Once you waive those you're locked in and if you no show the closing you'd lose the deposit for sure and be liable for damages.
The way I used to do it was, if they backed out they would lose their deposit of 1%
True
Hello, I’m refinancing my house. Lower rate, from 30 years to 20 years. The closing is in 2 days. But, I want to keep 30 years, so that the monthly payments can be lower, since I’m a single mother working hard... I thought $350 can be used for something else.
Please help
What a mess!
I don’t fully agree. Business is business if you have the right to back out and absolutely need to that’s your prerogative especially if the contract states it’s your right. If the sellers don’t like that they should have it void from the contract before signing. It’s not unethical if it’s in the agreement
I agree. Dave advises people to get out of bad deals all the time. This isnt any different.
@@ajm935 it's not a bad deal. They just aren't ready for the responsibility.
@@brendasgirl90 a bad deal is any deal that you know up front will hurt you. The terms of the loan may be really good, but just not for them in the financial state they are in now. Someone else of better means can (and should) benefit from that purchase.
Legal is not the same as ethical.
Michael Carroll correct but ethical is also subjective.
Logan is WAY TOO YOUNG to be dealing with all these issues
Including marriage
@@yeaimrj9778 especially marriage
What issues? He has managed to have cash in the bank, shares investment and 401K. The cars are the only mistakes but sounds like they're within the Dave limit. His advice should have been sell the cars, drive hoopties and pay the house down in 4-5 years. Mortgage free both working by 25yo. He'd be singing the praises if someone in that exact situation called him.
With all due respect no he is not too young..America is full a grown babies. All over the word there are young people doing great things.
Nah your never too young, three years ago I got married at 19, now I'm in my masters for psych and have bought a house (no kids yet). All you need to do is work those 60-70 hour work weeks for a couple years and your good to go.
Pulling out is very important !
He should have been more careful before putting it in
😂😂😂😉
Not if you got snipped
Wait till you're married, and you won't have to pull out 😘😘😘
Investing Hustler grow up
"Let's pretend this is true." Dave 2019
Edit: Folds arms and leans back in chair........looks out into space.
Dave has a soft spot in his heart with real-estate. If this kid called up and told him that he bought a $30,000 car yesterday he would tell the kid to go back to the dealer and beg them to take it back. Not sure what the difference is here. If the kid can avoid making a huge mistake than he should.
Yep, I was thinking the same thing. Dave used to sell real estate and he owns a lot of real estate. If you want to get out of a house deal you can there's plenty of things in the contract. The inspection is usually the easiest thing but his time has come and gone on that.
Dave explains it pretty clearly starting at 4:55, but to help clarify your confusion: A dealership that takes a car back isn't encumbered or damaged the same way that a family is when someone reneges on a home sale contract, on closing day no less. The kid should avoid making a huge mistake, but he should have to pay the price for wasting everyone's time, money and resources, too. I'm willing to bet the contract contains language that would do just that.
Something tells me this kid is misinterpreting the clause in the contract that he think says he can just change his mind without reasonable cause, like problems with the house after the inspection
I agree to a point but again buyers have more options to back out of a deal than sellers. This is why reading a contract before signing is crucial. Yes it’s 4836 pages but it’ll save you a ton of stress and money. Most of all it’ll save your from a little jerks like him ruining your life
You will just lose the earnest money if you pull out. It’s your right to not purchase it. Nothing’s final until you sign the paperwork at the title company.
You're exactly right people have the 10 to 15 day inspection, To remedy if they find something wrong they can back out and keep their money but after that period They lose their deposit in all contracts
Just ask for about $50,000 of repairs. Do the repairs or return my $3k -- Easy Decision. This is why when I sell my house, it will be as-is -- do inspections before offering.
I'm in the process of purchasing a home. You are absolutely correct
@@DrewSynder That only works during the inspection period. After both parties have signed off on repairs, you cant back out based on that.
@@kd8opi @kd8poi Of course -- you ask for 20% of the homes cost in repairs during the inspection - You're buying a $200k house -- ask for a new furnace, roof, windows, replacement appliances, flooring to be replaced, toilets to be replaced, etc.. ---- They do not agree, earnest money is returned. That's how it works.
I’m so glad I found this channel! I rethink every life decision I make!
Back out of the mortgage. They’ll find another buyer, you’ll set yourself back years if you go through with it.
not true! you can build some equity then definitely sale! and buy something cheaper CASH! or keep renting.
Buying a house in that price range is not going to be a make or break situation. Rent is going to be similar or more, but home ownership does require more discipline which is not something this guy has been great at up to this point, so provided he changes his ways he will be fine, if he continues his current behaviors he will almost for sure get into trouble.
Who gave this man a loan? He’s more of a kid than an adult
That was my first question. The house is pretty cheap, though. Hope it didn't turn into a money pit
They be in bankruptcy and foreclosure in two years.
Seller is required to have the home empty for the final walkthru , so these people have their life belongings on a truck somewhere and this guys gonna pull out the day before closing ? Dirtbag move
Who buys a occupied house?
1/15/20....I ALWAYS sell my house 1st + have closing so I get my money...BUT my sales contract statrs that I have up to 30 days to live in/occupy my old house. That makes SURE that I have closed + have the money in my bank account.
Then I go to closing & actually buy my next home & sign mtg papers.
THAT gives me time to make any changes in my new home---paint or carpet or put fence up for my dog---
& move in when I am ready + before the 30 days is over.
He’s just a kid.. He’s just too young to be rushed into house and marriage. He’s right to be scared and want to pull out. Do feel bad for the sellers though
What is the point of the final walkthrough to begin with...
@@mariosalazar7896 To make sure the condition of the property is decent before close of escrow.
I don't believe him, he is either lying or was told the wrong info, maybe scammed.
Love this answer. At 20 you need to not start a bad habit of going back on your word. He will be fine.
I love to hear a honest man talking about honestly thanks 👍
All of you saying he can back put have never been through a real estate transaction. There are agents, mortgage company, sellers, insurance companies, etc in on each deal. The buyer usually puts down a hefty earnest deposit that won’t be refunded if he backs out after contingencies have been met. It is not a simple walkaway.
Something tells me the realtor said "you can always back out" with out thinking he'd actually back out. Realtor was just trying to provide false comfort.
Yes the realtor was probably trying to talk him into that house and this kid felt uncomfortable about right from the beginning
Poor guy.. I went through real estate school and got my license about a week after I turned 18. I was by far, the youngest person in the school but the lessons I learned are invaluable.
I turn 18 soon how hard is the course and where or what do I even do to get my license?
It depends on what state you live In. I live in Florida so for example, the school I went to is a pretty well known school called Gold Coast realty school, I forget exactly how much it is, but it was a few hundred for the 7 days course. As far as difficulty, that’s kind of subjective. You got to school 8 hours a day for 7 days straight and then I would come home and study for a couple more hours each day. There’s two exams, a preliminary exam called your “pre test” and then if you score high enough, you take the state board exam. You just have to get a 75(ish) or higher to pass.
All that being said, I would caution you into rushing into real estate so young. Getting your license and starting out in real estate is an expensive process and you are your own boss, which means you are essentially starting a company even under the guidance of a brokerage company. It’s not impossible but you have to really make sure that’s what you wanna do.
Lastly, contrary to popular belief, there’s a lot you don’t need a real estate license to do. You don’t need a real estate license to buy houses, sell houses you own, rent them out, flip them for a profit etc. it just depends on what your overall goals in real estate are.
IGNORE Dave and PULL OUT Logan 🚶🏾♀️
😂😂
dirtbag move
Poor kid. They didn't teach you in school that real estate agents lie. They work on commission.
They do not get paid , only commission , that is true market for this job.
They do not need to lie , the house can tell it is condition from top to bottom.
Inspection due , u know what is that.
Case closed
It’s not unusual to back out without consequence. There are many contingencies that allow you to back out.
This kid is the stuff a seller has nightmares about and what if they have a contract on another house. He should have thought about all this beforehand.
Yes, but Buyers are also vulnerable. I've heard horrific stories that would make your hair fall out.
If he's got an "out" clause in the contract he is 100% morally and ethically above board in utilizing it....period.
Did the inspector find anything wrong with the house? Sometimes if the inspector finds something wrong with the house, a buyer has a way out of a deal. If the house passed inspection with a good bill of health, This caller may not have a way out of the deal.
Sounds immature and way in over his head. I really dislike the fact that he has no remorse and laughed at the fact of screwing over the seller at the last minute.
Tigerkem Yeah; disgusting. My business works with young entrepreneurs who have come in to money, and we generally reject anyone under 25 for this exact reason. They have no life experience and think the world revolves around them.
The seller can find someone else to buy their house, the market is excellent for sellers rn. Plus if this is true, they were dumb (or desperate) enough to enter into a realestate contract with such an easy out. Better to not hurt yourself financially to help someone else financially.
Tigerkem ....thats where society is headed unfortunately. We have bought and sold various real estate properties, and one would be surprised at how many times the buyers agree to certain terms and then back out with no real reason. Recently we had a buyer that negotiated some improvements on the house, even though these particular items passed inspection by THEIR inspector. We agreed to make the improvements at a cost of $7,000. Afterward they simply backed out. Could we sue them....maybe, but its not an easy process and even more difficult to actualy get the money. Unbelievable
This guy doesn’t know how a real estate transaction works
A lot of people don't. My mother once bought a house that the sellers didn't even own. It was a private sale, so obviously the title search that normally gets done wasn't done. The sellers were buying the house from somebody else and sold it to my mother before they had paid it off. It all turned out ok eventually; the sellers paid the house off on their end when my mom paid it off on hers. It was the goofiest thing I ever saw. I didn't even know about it until after she died and I was sorting through her papers. My hair absolutely stood on end.
You work after graduation, THEN YOU go for a master's.
And find an employer to pay.
It's easier to go straight through
What’s the point of a contract then?
All contracts have an out within a timeframe.
@@ajm935 No they don't. Some only have contingencies. So he could get out if his inspection showed problems.
@@CaptainCocaine Depends where you are from. In my country contracts MUST have an opt out or cancellation period.
@@lewiskelly14 Ok, so now we're back to "what's the point of the contract?"
@@CaptainCocaine Many have penalties if you withdraw - typically forfeiture of the earnest money
$130k house is probably a no brainer unless it's in a terrible neighborhood. He can easily rent that house out and make a little money each month.
If the contract actually says he could back out until the last day, he didn't "give his word to buy the house". When you sign a contract, you are promising to follow the language of the contract. If the contract says you can back out, then you aren't going back on your word.
This should have been a call to the realtor...
I backed out of a contract for a new home before from the builder. They took my $5,000 deposit but that was something I was willing to lose cause I found a different home I liked even better. It's normal, many buyers back out before closing (maybe not on day of closing) but sometimes the banks won't give the mortgage to the buyer for various reasons. Even when I closed my first home, the bank was giving me a hard time asking for documents they should have asked long before closing. I can see how some people may be like, "I don't have that document, I can't close"
Lender agreement contingency is almost always written into the sales contract. Irony here is that once the lender gives you a clear to close, you cannot use the lender contingency opt out.
There is a clause in Michigan that allows you to back out within three days if you want.
You should value your character more than finances. Great advice Dave.
Today, that makes you a “sucker” to most people. 😞
Whatever, Dave advises people to get out of bad deals all the time NOW he cares about what happens to the seller? No this kid should back out of this if he can't do it.
$134k house. Where can you find it.
We need an update.
Oddly enough the absolute best time to buy a home was 2-3 years ago lol
LOL yup 8.5% interest rates
Oh man if i was a seller and someone was backing out the day before closing I’d be livid.
Sometimes it’s warranted. We found mold at the final walk thru… it’s a health and safety risk not disclosed by the seller and was not detected at the time of inspection.
@@grumpyschnauzer then hire better inspectors. Mold is a big thing to miss.
DR is concerned the caller is breaking a promise, but it is a *conditional* promise (presuming caller is accurately describing K terms). If such a contractual condition allows for last minute cancellation (which is rare and must have been *negotiated*), that is the deal that was bargained for (and the risks assumed) by the parties. Hence, cancellation is not a breach but a permitted out-clause, just as if the contract was conditioned upon financing or inspection. If there is no such out-condition, then the caller would pay his penalty by forgoing part or all of his good-faith deposit, and the seller is duly compensated. Either way, there is no breach of honor, dishonesty, deceit, immorality, etc. by the caller.
BTW, don't buy is when one is getting married or just before having one's first child--too many emotions and expectations. Like Dave says, wait a year (I've seen this several times especially with first time parents with the homing instinct, only to regret it about a year after purchase).
J T Best piece of advice I have read in a while. Nice comment.
No real estate contract would allow him to back out the day before the closing. I think he doesn't understand the contract.
lol, he doesn't have to sign, no one has to sign. The seller can sue, but... Good Luck with it! A lot of people back out at closing.
I have been selling real estate full time for over 40 years. This is why I get big deposits for my sellers. We sleep good at night!
You have the inspection period to back out after that you lose your deposit if you back out
You want out of the contract before its signed? Don't sign.
You just lose your deposit.
.
The earnest money and all of the costs incurred so far are typically on the buyer backing out this late.
.
They should clear the car debts before buying a house.
If they don't have a plan to clear those they don't need another loan.
In our scenario the Inspector did not detect mold. We found mold at the final walk thru (after some rain). Pictures in the listing show a new post on the porch but old Google images show a moldy post. Also, seller did not satisfy his contractural agreement to remove metal sheds in the backyard. These sheds were present at the time of the walk-thru. We are heavily considering backing out after this seller was also doing everything possible to stall the sell.
Great advice Dave! He has a lot to learn about keeping his word and managing his personal finance
I had someone back out of a closing on me .I got to keep their deposit and down payment .28 k in my pocket thank you. Did I feel bad no the people were not picky and thought they were smart.They were to cheap to hire an attorney for a realestate transaction.
i want my 1000 due diligence for them not revealing they had termites and damage because of sellers can be dirt scummm...
If he bought the house 3yrs ago, dave hes winning now its gonna be 250k in 2023
The worst case is buy the house and rent it! Live with your parents or rent a room till the house is paid out. Then move in to your new paid house.
great advise!!!!!! im doing that after buyer's regret!
Licensed realtor here weighing in on the situation. This is what I'm thinking is going on
1) his realtor has no idea what he or she is doing and is misleading him.
2) the realtor added language in the additional terms of the contract that allows the buyer to walk away at any time without penalty even after the inspection period and loan commitment. Still seems strange because I can't think of any sellar that would be dumb enough to sign a contract with that ridiculous contingency.
I'd like to hear how this whole thing gets resolved. I would assume he's going to forfeit his deposit or incur some legal action. But then again you never know oh, he's in the Midwest and the sellers may have a kind heart.
First time I disagree with Dave. Get out if you can those people will be fine. They will find a buyer, meanwhile you avoid a mistake that will potrntially set you back financially for a very long time.
Being able to relate to this situation. It’s not that easy to purchase a house/home. Based off of my intuition that sounds or seems like closing cost and other fees may have caught them off guard and if your not prepared for all these expenses, still have a debt the house/home purchase will surely break or bust your budget. He is a successful young man though and will be successful hopefully going further with such great aspirations at a young age.
Buyers remorse is a real thing and that is why hey have you sign a contract. There is damage done when you back out of a contract and penalties can be collected.
Wow, that's the first time I saw Dave stumped. Character vs Baby Steps.... That is tough indeed. But I totally get it
Steffy BelizZz If you have any skills at all, you’ll make the money back. You can’t get your character back.
@@theandrewhenderson Absolutely, but that is IF they have any skills at all. On the other hand, I do believe that character can be redeemed through growth and maturity but still, that's assuming they can do that too! Tough call
Its weird. He should have advised sell the cars, honour the contract, enjoy the house and pay it down in 4-5 years. They were sitting ok financially apart from car payments. In fact he was doing well age 20. Dave lost it coz all he could see was a contract. He was like a deer in headlights.
Yeah, not for any reason. He literally would have to come to closing and find out for some reason or another that he had not been fully approved for the loan. If that's not the case and he backs out he could be sued for specific performance and they can take his earnest money . I would love to see that contract.
If he's got an "out" clause in the contract he is 100% morally and ethically above board in utilizing it....period.
Why are houses in the states always so cheap? 100-200k buys you a house? You can't even buy a trailer home for that price in vancouver?
He should have spoken with an attorney.
Almost one year later I'm curious what happened after this call. I'm surprised to hear a realtor telling a prospective home buyer possibly an agent of the seller unless he's paying for a buyers agent which it doesn't sound like the kid is that he can back out right up until closing, realtors want to get paid.
He tells this guy he should be bound by his word, but dave also tells people all the time to offer settlements on credit card debt for pennies on the dollar. How is that different. The cc contract said the people would repay
If you can cancel the contract for no reason or contingency, it is illusory and unenforceable.
Obviously many bad decisions were made buying a house, trying to back out the day before, and getting married at 20 is absolutely crazy. It’s ludicrous. I will give him credit though . It is extremely good to be able to make 40k a year at 20 years old that’s pretty impressive. Which is why is surprising that someone that smart being able to make 40k at 20 is making some bad decisions
This is not a legitimate call. There is no way a real estate purchase contract would allow a buyer to walk away without suffering some loss meaning losing the down payment. Possibly even being sued by the seller for breach of contract.
The girlfriend probably insisted on getting a house
Shes getting him to buy a bunch of stuff so when she leaves him she has more to take.
@@SmokeyDeadGames that's the way to do it
He’s not sure why are u saying he has to buy it ?
Hes being honest, someone else will buy it. I don’t think ur that a good of a guide or come to person.
Sad.
You need to re-watch the video. Dave explained everything in detail.
In North Carolina you lose Earnest Money only for the property. In addition to that, whatever you've paid up until then, is gone.
BTW Dave, wow 3,000 real estate deals is an amazing feat. Love your work
Dave should know that no one is going to sue if you back out.
Not true at all.
He's not buying a house, he's buying a big headache for him and his wife.
No. Contracts are just to state the terms. Contracts can be canceled. It's not someone giving one's word. Buyers and sellers should make sure each other is happy with the terms before making it final.
Why wouldn't the seller be happy? If the house doesn't sell to him, sell it to some one else. It's not the end of the world for the seller, but it may be for the buyer.
The sellers also know the contract is not complete until the date. Sell if you want. Dave is salty bc he doesn’t want that to happen to him lol
How did he break his word if the contract has a "I can back out" clause?
Why even make a contract if the person who signed has no obligations?
Bráulio Bosi to make sure the seller can’t sell 😈
Always have a contingency clause(s).
You have all these contingencies and you will never get an accepted offer on a house. Your offer will be sent to the bottom of the pile guaranteed, Been in the real estate business for 30 years...
Seriously, getting into a huge financial situation when he is not comfortable or prepared to do so? If the contract says he can break it THAT'S PART OF THE CONTRACT TOO! If the seller signed it they knew and agreed to that no moral problem.
You can do alot of things but don't ever go back on your word, A man is only as good as his word.
Meanwhile, politicians and the ultra wealthy break their word all the time and fail upward. People are kept down because they value ethics over playing the game.
Buy the house. Jeez, $120K is doable on their combined $60K. She's got through her study on very little debt and he has 401K, investment shares and emergency savings. Their cars values also sound to be within Dave's rules. Their only real mistake is the car finance but even that is manageable. He was harsh coz he was stumped. The house actually sounds a great start to marriage and a target to get paid down.
Dave’s voice is everything
Why not buy the house then put it for sale immediately after move in day?
Blake do you realize how much it costs to sell a house? He would LOOSE significant money, about 15K!
B C that’s not accurate. In theory, selling a house is not that expensive, especially if you private sell it. Minus taxes there wouldn’t really be any other expenses because that would be covered by the buyer. Additionally, I’d rather be $15k in debt than have an entire mortgage I can’t afford risking foreclosure or bankruptcy.
@@blakeb4583 he would still be out money genius. Hiring a realtor, appraisal fees, etc etc. that is very dumb. Maybe figure out what you’re talking about before you comment next time.
@@MikeHoncho610 risking bankruptcy and foreclosure over being indebted to the bank for $15k-$30k is a worse deal if you ask me.
if it's in the contract, it's not unethical to back out. that's the point of the clause in the contract
no you are confusing illegal and unethical. the contract just covers the legal matters not the ethical more so. people seem to think because something is legal or contractual ..it is ethical
I got married at 21 years old. Still together with my wife. I love her since day one. We’re doing very well. 7 years of marriage and still going strong. I think it just depends on the level of maturity these two are
your the anomaly.
Nothing to be laughing about! I’m a seller currently and this is absurd. Be 100% sure before signing a contract!
You can get out but they have the right to take you to mediation, that’s in the contract at least here in California.
Why does Dave get upset when this guy wants to renege on a deal but doesn't get upset when people renege on their deal with credit card companies? You signed a contract with the credit card company to pay them as well. In this case, if what the guy is saying is true, it's actually in the contract he can back out. Seems like a contradiction.
Yes! My thoughts exactly.
I am guessing because he does real estate himself.
@@emmanuelgomez1973 so he's hypocritical?
I am guessing yes. But I can't judge the guy because I have been hypocrite in some cases and probably most of us have. But you are right cc or any other loan should be paid off because we made a commitment to pay it off.
Yes, Dave is very self-serving. He doesn't want anyone purchasing a home unless they pay all of it in cash, which is practically impossible until you are near the eclipse of retirement, even if you make six figure incomes in most metro areas. He prefers people to rent because he personally owns thousands of residential properties and represents rental associations. Just trying to keep pumping up people to rent as the way to build equity [for himself and other landlords like him]. This is validated when you hear callers call in saying their income is good due to rental properties they hold, he high fives them on the air.
Change the closing date, it’s the kiss of death to the real estate contract. Hire a real estate lawyer to help you. Realtors set the closing date and assume (tell you) that certain things are not negotiable.
Do the States not allow the potential buyer a few days consideration breathing space? We have a week to reconsider as part of our national legislation.... this is because we realize that buying a house is a very emotional and is often made on the spur of the moment.
What we do have in South Africa though is that all house purchase contracts have to actually STATE the breathing room clause.
You can always back out but, you’re gonna pay for it. Even if somehow in the clause it did say that, they’re probably gonna sue you civilly for it,
Unlikely they would sue on a 134k home. However, he'd lose his entire earnest deposit. Additionally, if he didn't already pay out of pocket for the appraisal or home inspection, he'd be legally billed for that as well. Possible more financial penalties would be incurred, such as paying the realtor's fees regardless of outcome, but generally speaking the ED and costs incurred items would be of minimum amount completely forfeited.
Did Logan ever say WHY he wanted to not close? Does he expect income to decrease? Was he unhappy with the inspection?
Hey Mr. Ramsay,
But don’t a person can back out three days after close?
You might never had it but it can happen
Dave is right, but if the seller actually did sign a contract like that, it was stupid on his part and the buyer has every right to walk away.
I think it would be worth a call to the seller let them know what's on your mind and possibly offer them a couple thousand buck for the headache, assure them that you are a man of your word and you will go through with the transaction as promised but you just wanted to give them a call and see if there wasn't a possibility of working out and alternate solution
Don’t make promises you can’t keep.
5 years later, interestingly, if he did the honorable thing and purchased it, he probably has a $400k home for the price of $134k, haha. WOW. But he was only 20, which yes, is an adult, but a young and less wise one.
I'd say it's OK to back up (assuming what this guy says is accurate). The contract says it that way for a reason --- the sellers chose to go into a cancellable contract because they believe they're getting something in return, i.e., more potential buyers.
If you can back out up until closing for any random reason, what's the point of the contract then? Something doesn't sound right. 🙃 Dave: "okay so um let's pretend that this is true 🙄 ..." 😂 1:49
If u gotta walk u gotta walk
That's a tough one...but if it doesn't feel right, don't do it
If he's the buyer he can back out. He would lose his due diligence payment. But that's in NC
When I moved to texas I sold my house in Reno they signed the contract the she was a counselor from the college she was trying to get them to back down I had put in an a.c. system and all new apliances so we all got together in one room with the counselor and she was this close to get sued and so where the people that were going to buy house so they bought the house and I moved best thing I could have ever do cause now my house in texas is paid off
Glad it worked out
Dave is just wrong on this one. If the contract says that you can back out, then there is nothing unethical or immoral about backing out.
Uh what.
@@MikeHoncho610 Did you actually watch the video? The caller said that the contract says he can back out anytime before the closing, and Dave said that it would still be unethical for him to back out of the deal before closing.
@@rreagan007 with undisclosed reason? Yes it is unethical that’s correct. If he say, couldn’t get financing approved, the seller wasn’t fixing things based on inspection report, etc etc. then yes, 100 percent good reason to back out. But because he just changed his mind? It’s legal in this case but ethical…not so much. And stop liking your own comments it’s weird.
@@MikeHoncho610 You're actually saying that if the contract says you can back out for any reason before a certain date, and you exercise your right to back out before that date, that that is unethical somehow?