The buyer had ADD among other problems

A couple of days ago, escrow called me to tell me that the buyer's earnest deposit check had bounced. I sighed, called the buyer’s agent, emailed my seller, and started preparing a notice to buyer to perform.

It happens occasionally that a buyer doesn’t understand that the earnest deposit check will be cashed at the start of escrow. It states on p. 1 of the residential purchase agreement that the check will be sent to escrow within 3 days of acceptance, but sometimes the buyer thinks that escrow will just sit on it until the loan funds. To be safe, I tell my buyers when we first start looking at properties that they’ll need about 1% with a minimum of $2000 for properties under 200k in our area as there are so few properties in that price range. I also say that the money should be in the account. Then I repeat this detail when we write the offer. I try to mention it a third time when I receive the check and log it into my office trust log. I also manage to repeat a few times that the date on the check should match the date on the offer. Then I explain that if the offer is rejected, I’ll return the check, and they’ll need to make out a new check should they decide to write another offer at a later date.

Some of my clients must think I’m forgetful because I repeat myself so often, but it has to do with one of my first buyers, a woman who had trouble remembering details that didn’t fit in with her ideas about real estate. I came to realize that she not only had Attention Deficit Disorder, she worked with some kind of a coaching group that taught people how to invest in real estate, and she firmly believed whatever she thought they had taught her…

I first ran across a child with ADD who wasn’t hyperactive when I was doing academic tutoring after college. I was perplexed at her obvious lack of short-term memory, and it took a lot of work just to teach her a short narration in Spanish. Later, when I finished graduate school and taught at a series of community colleges, I got to the point where I could pick out the students with ADD within the first week of class. I would gently tell them that I wasn’t a specialist, but that I suspected that there was a problem that they needed help with. Over and over again, they’d go to the disabled student program, they would take tests, and they would invariably find out that the reason they’d always been mediocre students was because they had ADD. Then, they’d get tutoring, tips on study habits, and would struggle through first semester Spanish. They’d limp on to the second semester, where they’d finally succumb. It was incredibly frustrating for them, and a few told me that they were successful out in the “real world” but had decided to go back to school to get a degree.

Karen (not her real name) appeared to be confident in her own field, which was as a military paramedic, but I had grave doubts about whether or not she would ever make a lot of money in real estate since she was in her forties and had never owned her own place. Later, someone told me that people with ADD can do well in stressful jobs because the adrenaline helps them focus. Well, real estate can be stressful, but not in a way that helps anyone read the contracts more closely.

She told me that she had signed up once to take a real estate course but quit when the instructor told the class that everything was in the books. She still had the books but hadn’t read them yet. This should have been a red flag, but I thought I could explain the major points to her in everyday language.

What Karen was good at was chatting. She would walk right up to people wherever we went and find out about the neighborhood. She had an exotic Asian and Caribbean background, had lived in Europe, and had lots of interesting stories to tell. She also had very unusual ideas about religion and divine retribution, which extended to her gun collection. She would have been inclined to use one now and then during our search for a property for her, but luckily for the annoying people on the freeway, she wasn’t carrying a gun on her.

The last afternoon I spent with Karen was our third outing in about as many weeks. I was driving on the 215 and was in mid-spiel about the local history when she suddenly pulled a hair out of my head and proclaimed, “I rebuke you in the name of the Lord.”

“Ow,” I said, rubbing my scalp. “What was that about?”

“That’s a gray hair,” she said, shaking it at me. “Before sin, we were immortal and didn’t age. So aging is a sin.”

“Aging isn’t a sin,” I told her. “It’s a reward for surviving.”

“I don’t plan on getting old,” she replied.

We were actually rather close to Patton State Hospital in Highland at that moment, and I should have dropped her off right then, but she had been referred to me by someone, and I was trying to do a good job. She was also pre-approved and not just pre-qualified by her lender. So I began talking about the condo complex I was taking her to and how there were several nice units there in her price range.

We visited 4 units in the complex, looked at the pool, and talked to some of the denizens. Then as I was preparing to drive away, she pointed to a unit that had a lockbox and a sign in the window.

“But it’s not showing available in the MLS,” I told her. “I don’t know anything about it. Maybe it’s already in escrow.”

But Karen was very insistent, and the condo was vacant, so even though I couldn’t get through to the agent, I thought it wouldn’t hurt to take a quick look. The condo turned out to be quite nice and a reasonable rehab job with only a few unfinished details. She was very enthusiastic about the place, and my hope began to revive that she would finally buy a place, and I’d be rid of her. Then the agent called me back, told me that it was her own property, and she was putting it on the market that day with a decent price and acceptable commission. She hadn’t even put it in the MLS yet. Things were looking up.

We raced back to my office in Riverside and started writing up the offer. I spoke with her lender, got details, and was about a dozen pages into the contracts when she said that she thought I had the wrong address.

“This is the condo you liked,” I told her.

“No, it’s not. The one I want is on the other street by the freeway.”

“No,” I said, showing her the Thomas Guide. “It’s on the next street over.”

I almost never get lost. I can’t remember people’s names to save my life, but I usually know where I am. But I couldn’t convince her. If you ever had the experience of having to prove to a child with ADD that the answer to 2 plus 2 is 4 just like it was yesterday, you’ll understand my predicament.

Finally, I said, “We can go back and make sure if you want.”

So we drove back to Highland, and I proved to her that I was right. She wasn’t at all apologetic, but I took it in stride. One of my personal rules is not to say, “I told you so” because I figure the other person is already feeling annoyed enough at being wrong.

We went back to my office and continued work on the offer. Then, I asked her for the check, which, as I'd told her before, should be $2000 for her to be considered seriously in the seller's market.

“Change it to $1000,” she said.

“That’s not enough,” I replied. “You know it should be $2000.”

“$1000.” She took out her checkbook and started writing.

Instead of choking her, I changed the figures and then starting printing up the forms.

When I gave her a printout of her estimated costs sheet, she balked at the closing costs.

“Why are they so high?” She asked.

“Well,” I told her, “you’re buying something, and there are costs. There are escrow fees, inspection fees.…” We’d been over this before, but she seemed to have forgotten. She frowned, then finally signed.

A few hours later, after she’d left, and I’d sent the offer, I got a call back from the listing agent. She liked the offer over all and was only going to counter that the deposit be increased to $3000. Excited, I called my buyer and told her that her offer was accepted and she only had to go up to $3000 on the earnest deposit.

“Why?” she asked.

“It’s to show that you’re serious, you know, as in ‘earnest.’”

“But how come people always say you can buy with zero down?”

“Well, you don’t have any down because you have 100% financing.” I sighed. We’d been over this numerous times. “You’d get it back at closing if you brought in all your closing costs. But this way, they’ll just deduct it from your closing costs.”

“So why do I have to have it now?”

I shut my eyes. “To show that you really want the place.”

“But I do want it.”

“Then go up to $3000.”

“I don’t have it.”

“What happened to it? You had your closing costs three weeks ago.”

She didn’t answer.

“Can you get it?”

“I’ll try.”

“So I’ll tell her that you’ll do it?”

“Yeah.”

I called the other agent back and told her that my buyer had agreed verbally to the counter. She faxed it at once and then was nice enough to put the listing in the MLS as pending.

Late that night, my buyer called me back.

“This guy I know says I only need $500 for earnest deposit money.”

“Is he a realtor?”

“Yeah.”

“Where?”

“Up North.”

“Not in the Bay Area.”

“Right.” Then she added, “And he says those closing costs are too high. That there’s a limit of what percent it should be.”

“Was he referring to the cost of the loan only or was he also referring to all the things you’ll need like a home inspection and the appraisal. It’s all on my web site that I told you about. You can show it to him.”

“He just said that there was a limit.”

“Well, he’s not here. I’m here and I’m your agent. These people want $3000, and they won’t settle for less. Can you get it?”

“I can’t get it. My friend was going to lend it to me, but he changed his mind.”

I shut my eyes. I wouldn’t have lent her anything either. “But your lender had verification of your funds.”

“Yeah.”

I rubbed my eyes. “So I’ll tell them that you’re not going to agree to the counter, and I’ll mail your check to you.”

“You can tear it up.”

“I’ll mail it to you.”

I called the agent right away and left a very apologetic message saying that the buyer had somehow spent her earnest deposit money during the last few weeks without telling me about it. I knew a lot of random details about her parents, her daughter, her ex, and flying the wounded out of Afghanistan, but I had no idea where her savings had gone to.

The next morning, I called the realtor who had referred her to me and told her what had happened.

“But she had the money. I saw her bank statement.”

“Well, she doesn’t have it now.”

“I told her not to buy anything.”

“I’m sure you did. I did, too.”

I’ve been fortunate since then and haven’t had any more buyers with ADD. I think they may have trouble slogging through my verbose web site. The only reason I even got Karen was because her first realtor could read quite well and liked my web site. She sent me another referral after that who turned out to be a very sane and intelligent woman. The only problem was, we then ran into … the seller’s agent with the son who had ADD…

To be continued…