Tilted Forum Project Discussion Community  

Go Back   Tilted Forum Project Discussion Community > Chatter > General Discussion


 
 
LinkBack Thread Tools
Old 11-20-2004, 11:09 AM   #1 (permalink)
Upright
 
What can I do about this horrible situation?

What can I do about this horrible situation?

Several months ago, my wife and I sought to buy a particular large-format print shop. We share a common tax lady with the sellers. The tax lady knows that their business has become "quite a little cash cow" since they had started it 23 years ago. They own their enormous homes, vehicles and all the fun toys with almost no debt. In their business, they've paid cash for almost everything, including one of the two buildings. And although they enjoy a reputation for quality work, they have basically stopped working it. The tax lady would have snapped it up herself, except that she is preoccupied with her own businesses.

Since my wife and I have never bought a business before and the sellers have never sold one, we asked our tax lady to recommend a business broker for us. She suggested her former neighbor, John K_________, of S_________ Realtors, to moderate this transaction. He had us sign a dual-agency agreement, stating emphatically that he would represent both us fairly and professionally...

Nothing could be farther from the truth.

Since my wife and I have only had experience with residential real estate lending, we had no idea how much time was needed for a business escrow involving an SBA loan. John, the self-proclaimed expert, actually asked us how long we wanted it to be! We had no idea. 30 days? 45 days? We'd only had experience with residential real estate investing. Without informing us that SBA loans typically take six months or more, he drafted a 45-day escrow for us to sign. We did. And we put down $25K...

When my wife and I asked him to recommend a lender, he would not. Naively, we suggested a bank that has done a fair amount of residential lending for us. Only later did we find out how much John pressured (and outright harassed!) their SBA lending department to do the loan quickly. Wisely, they slowed down to check the details. The price was rather low for a large-format printer (the sellers were glad that we wanted to own/operate the business, just as their family had), but ultimately the bank declined due to low sales for the current year (the three years before had been above $1M and growing). But 2004's YTD (at the end of July) was only $490K. The bank suggested that we ask a lower price for the business. John urged us to make an outside agreement with the sellers (keeping it secret from the bank) to "carry back" a private loan for the difference. It made us very uncomfortable that John wanted us to deceive our own bank.

When my wife and I approached the next lender, it became clear that there was a big discrepancy between the sales figures John had prepared and the tax returns that the sellers filed. During that loan application process, our tax lady actually redid the sellers' books, and amended/resubmitted their latest tax return (and they paid a lot more!). During this time, John called us several times daily, pressuring us to collateralize everything, including our primary residence. But this second bank also declined, stating that it would require an enormous effort to replace abandoned customers. And they informed us that SBA loans usually take several months to do. Meanwhile, John harshly criticized our business plan (to which he had contributed nothing) and questioned our creditworthiness (our personal fico scores are 650 and 790) to the sellers.

Nevertheless, I approached a third lender with continued enthusiasm and helpful (large print) ideas for improving the look of the bank itself. However, I warned them that our "dual-agency" broker was a notorious pest who would undoubtedly harass them, if given the chance. We instructed John not to call us more than once a day, and not to raise his voice or repeat himself endlessly when he did. Then he began to pressure us to remove our loan contingency. After we had submitted everything to this bank, we left to enjoy a quiet holiday weekend in the mountains. When we did not return his calls for those three days, John was angry and threatened to "kill the deal." And sure enough, he urged the sellers to issue a 24-hour notice to perform. We reminded him that we'd performed our part, and were just waiting for the bank's decision. Also, we pointed out that the CARS form he used states that at least 48 hours notice must be given. When they expressed doubts about the 2004 sales figures, we recognized that John had indeed killed the deal.

Yet, since John was brought into the deal to represent the sellers and us exclusively, I was somewhat surprised to learn that he now has the sellers' listing for their business. John abandoned us. He is no longer acting as a dual agent. And he set the price higher than what my wife and I had agreed. Apparently, he betrayed our dream for a bigger commission. But what really irks me is how he asked that escrow fees be deducted from our refund...

Last edited by ca_redwards; 11-21-2004 at 01:44 AM.. Reason: To remove John's identification
ca_redwards is offline  
Old 11-20-2004, 06:19 PM   #2 (permalink)
Crazy
 
Location: California
Perhaps you should have a talk with your tax lady. Why would she suggest such a horrible person?
joeshoe is offline  
Old 11-20-2004, 06:42 PM   #3 (permalink)
Go faster!
 
DEI37's Avatar
 
Location: Wisconsin
She's probably fucking him on the side and he's getting referrals that way. Blackmail or some such nonsense. That's just terrible. Did you get your $25G back?
__________________
Generally speaking, if you were to get what you really deserve, you might be unpleasantly surprised.
DEI37 is offline  
Old 11-20-2004, 07:20 PM   #4 (permalink)
Enter Title Here
 
Location: Tennessee
Sounds like I would be getting my 25k back, and finding a new tax person. I would also probably try to have the escrow fees waived, since I'm sure that service wasn't cheap...

Sorry that you had to go through all of that
Bamrak is offline  
Old 11-23-2004, 11:56 AM   #5 (permalink)
Upright
 
Dear John,

I apologize for the Saddam quip that I included at the bottom of my most sincere "What can I do about this horrible situation?" question. Where I have been able to edit my message, I have removed that reference to your physical description. I will refrain from any such parody, since it dilutes the seriousness of my inquiry.

Obviously, my wife and I expect a full refund of all unspent money from escrow. All expenditures that continue to benefit the sellers should be deemed their sole responsibility. And those expenditures that benefit no one should be split. We should not be charged exclusively for anything. Readers everywhere agree.

The remainder of my message is factual and verifiable. It will remain as is. My intention is to rally an advocate to help secure our refund. It is not to slander.

I must ask you to stop including my wife in this matter. She had nothing to do with it. She only learned about it when you called her demanding an apology and retraction. The decision to compose and distribute my inquiry was strictly my own. Leave her alone.

Thanks for reading.
ca_redwards is offline  
Old 11-23-2004, 12:40 PM   #6 (permalink)
Beware the Mad Irish
 
Blackthorn's Avatar
 
Location: Wish I was on the N17...
Quote:
Originally Posted by ca_redwards
What can I do about this horrible situation?

Several months ago, my wife and I sought to buy a particular large-format print shop. We share a common tax lady with the sellers. The tax lady knows that their business has become "quite a little cash cow" since they had started it 23 years ago. They own their enormous homes, vehicles and all the fun toys with almost no debt. In their business, they've paid cash for almost everything, including one of the two buildings. And although they enjoy a reputation for quality work, they have basically stopped working it. The tax lady would have snapped it up herself, except that she is preoccupied with her own businesses.

Since my wife and I have never bought a business before and the sellers have never sold one, we asked our tax lady to recommend a business broker for us. She suggested her former neighbor, John K_________, of S_________ Realtors, to moderate this transaction. He had us sign a dual-agency agreement, stating emphatically that he would represent both us fairly and professionally...

Nothing could be farther from the truth.

Since my wife and I have only had experience with residential real estate lending, we had no idea how much time was needed for a business escrow involving an SBA loan. John, the self-proclaimed expert, actually asked us how long we wanted it to be! We had no idea. 30 days? 45 days? We'd only had experience with residential real estate investing. Without informing us that SBA loans typically take six months or more, he drafted a 45-day escrow for us to sign. We did. And we put down $25K...

When my wife and I asked him to recommend a lender, he would not. Naively, we suggested a bank that has done a fair amount of residential lending for us. Only later did we find out how much John pressured (and outright harassed!) their SBA lending department to do the loan quickly. Wisely, they slowed down to check the details. The price was rather low for a large-format printer (the sellers were glad that we wanted to own/operate the business, just as their family had), but ultimately the bank declined due to low sales for the current year (the three years before had been above $1M and growing). But 2004's YTD (at the end of July) was only $490K. The bank suggested that we ask a lower price for the business. John urged us to make an outside agreement with the sellers (keeping it secret from the bank) to "carry back" a private loan for the difference. It made us very uncomfortable that John wanted us to deceive our own bank.

When my wife and I approached the next lender, it became clear that there was a big discrepancy between the sales figures John had prepared and the tax returns that the sellers filed. During that loan application process, our tax lady actually redid the sellers' books, and amended/resubmitted their latest tax return (and they paid a lot more!). During this time, John called us several times daily, pressuring us to collateralize everything, including our primary residence. But this second bank also declined, stating that it would require an enormous effort to replace abandoned customers. And they informed us that SBA loans usually take several months to do. Meanwhile, John harshly criticized our business plan (to which he had contributed nothing) and questioned our creditworthiness (our personal fico scores are 650 and 790) to the sellers.

Nevertheless, I approached a third lender with continued enthusiasm and helpful (large print) ideas for improving the look of the bank itself. However, I warned them that our "dual-agency" broker was a notorious pest who would undoubtedly harass them, if given the chance. We instructed John not to call us more than once a day, and not to raise his voice or repeat himself endlessly when he did. Then he began to pressure us to remove our loan contingency. After we had submitted everything to this bank, we left to enjoy a quiet holiday weekend in the mountains. When we did not return his calls for those three days, John was angry and threatened to "kill the deal." And sure enough, he urged the sellers to issue a 24-hour notice to perform. We reminded him that we'd performed our part, and were just waiting for the bank's decision. Also, we pointed out that the CARS form he used states that at least 48 hours notice must be given. When they expressed doubts about the 2004 sales figures, we recognized that John had indeed killed the deal.

Yet, since John was brought into the deal to represent the sellers and us exclusively, I was somewhat surprised to learn that he now has the sellers' listing for their business. John abandoned us. He is no longer acting as a dual agent. And he set the price higher than what my wife and I had agreed. Apparently, he betrayed our dream for a bigger commission. But what really irks me is how he asked that escrow fees be deducted from our refund...
I hate to say it but it's time to lawyer up. That also depends on how much green salad of salvation you have tied up in escrow. If it's significant (and I suppose it is) you should lawyer up quickly to get the facts journaled while you still remember them. A quick review would tell you whether or not you have a case and a lawyer's call to John might be enough to get him to change his tune.

Good luck...
__________________
What are you willing to give up in order to get what you want?
Blackthorn is offline  
Old 11-23-2004, 01:34 PM   #7 (permalink)
Junkie
 
kutulu's Avatar
 
Quote:
Originally Posted by kjroh
I hate to say it but it's time to lawyer up.
They only have $25 tied up in the escrow account. Although I have no idea what the escrow fees are that they want them to pay, it's probably on the order of a thousand or two. Lawyers fees would be larger than the amount of money they'd be suing over.
kutulu is offline  
Old 11-23-2004, 01:49 PM   #8 (permalink)
Custom User Title
 
Craven Morehead's Avatar
 
There are also state (I assume you're in the US) boards that you can file complaints to. But definately, lawyer time.
Craven Morehead is offline  
Old 11-23-2004, 02:02 PM   #9 (permalink)
Crazy
 
Location: Tracy, ca
What state are you in? Did you sign an exclusive agency disclosure with the realtor? If the business is worth fighting for then lawer up. Sounds like the business is not doing well this year. Be careful because tax returns can be inflated by savy owners to increase the worth of there business. If you are ok with the sellers talk to them directly go to there house face to face, maybe there can be some owner financing action. Have them sign the release instructions from the title company too so that you will get your deposit back then fire this realtor and have antother buyers broker rep you and put the offer in you and your investors feel comfortable with.
Tracybrian is offline  
Old 11-23-2004, 02:49 PM   #10 (permalink)
Upright
 
Quote:
Originally Posted by kutulu
They only have $25 tied up in the escrow account. Although I have no idea what the escrow fees are that they want them to pay, it's probably on the order of a thousand or two. Lawyers fees would be larger than the amount of money they'd be suing over.
You forgot the "K" after that figure...
ca_redwards is offline  
 

Tags
horrible, situation

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -8. The time now is 11:07 AM.

Tilted Forum Project

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2024, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0 PL2
© 2002-2012 Tilted Forum Project

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360