Posted by SueC on September 07, 2000 at 20:35:04:
…if you get an attorney to help you sue, you’ll FOR SURE spend at least $10K if it goes to court - whether or not you succeed in getting the seller to perform on the contract.
Can seller back out? - Posted by Rickey TX
Posted by Rickey TX on September 07, 2000 at 15:40:55:
I have a signed contract on a SFH that is to close in about two weeks. The seller called me initially just wanting to get out, tired of being a homeowner. She is 6 months in arrears and the bank has started foreclosure. She now tells me a friend is going to help her keep the house, but I believe she is wanting to sell to that friend or someone else. What, if any, are my options?
Thanks one and all, Rickey
Re: Can seller back out? - Posted by Jim IL
Posted by Jim IL on September 07, 2000 at 23:21:16:
Rickey,
Maybe my mood today precludes me from being “Mr. nice guy”, but if this were me, I’d run, not walk and record a memorandum of agreement at the county recorders office.
Then, talk to your seller and tell her that you intend to close the deal as the signed agreement states.
If they balk at this, let it slip that you have already recorded that memo, and see where it goes from there.
If the seller is really going to back out, and they try to sell to someone else, then your interest will appear (should), on any title report generated.
The seller may come at you angrily at this point, but so what, they’ll get over it.
or
The seller may just close the deal with you.
You can release this memo for a fee if they will not close with you.
Not as much as you would have made, but something for your trouble.
And, if this does not work, then release it anyway and move on.
Certainly a $25k-$35k payday would be nice, but a court battle will take money and time away from you.
And this would be better spent finding other deals.
Surely you can find another one, since you found this one.
Good luck to you,
Jim IL
Re: Can seller back out? - Posted by Beldorian
Posted by Beldorian on September 07, 2000 at 23:14:57:
Can’t you just put a lien on the title? I would appreciate comments on this from more experienced investors.
But, if you have a signed contract, it would seem to me to be an easy strategy to put a lien on the property and then if there is a title search done, the title co. will discover it and get in touch with you. At that time you can decide on what you want to do?
Re: Can seller back out? - Posted by JoeS
Posted by JoeS on September 07, 2000 at 22:29:24:
Sure they can. But, what do you have in your contract with the seller as your recourse? You should have something in there that they are responsible to reinburse you for any expenses that you have already incurred, Title, appraisal, advertising etc. That is only fair. I think something along this line is only being reasonable. After all, you do not want to lose on the deal. You are only losing created money and the time that you put into it. You could put a price tag on your time and try to get that from them too, I did that once. But then again, if they are facing foreclosure, they probably do not have a lot of cash laying around. I’d like to hear from any investors who have sued for “specific performance” and won.
Re: Can seller back out? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on September 07, 2000 at 18:35:59:
Rickey, I gave you my input on Bronchick’s site. To summarize, I’ve used a “Memorandum and Affidavit of Agreement” to coax a seller back into reality. It’s cheap, quick, and sometimes works.
Good luck-
Stacy
The Questions To Ask Are… - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on September 07, 2000 at 16:49:05:
Rickey,
Sure! The seller can back out. What you want to ask though is:
- Is it worth your time/effort to pursue enforcing the contract? In most cases, the answer is “no”.
- Is this “friend” really her salvation? I’ve been working the preforeclosure market for 1.5 years now. My partner and I have had deals go sour. But, we’ve had many more deals where the seller “backed out” because a friend/family member was going to rescue them or they were going to refinance. More often than not, we get a call back asking us to help them again. Their “other options” fell through.
So, what I would do is point out that you have an agreement, and explain that you’ll let them out of it (because you’re a nice person). Then, sit back, and wait for your phone to ring.
Bill K. (AZ)
Re: The Questions To Ask Are… - Posted by Rickey TX
Posted by Rickey TX on September 07, 2000 at 17:46:57:
Bill,
Thanks for your response! This may be worth the effort, I stand to loose possibly 25-35K. But, I’m not sure what I can do.
Thanks again, Rickey
Re: The Questions To Ask Are… - Posted by Bill Gatten
Posted by Bill Gatten on September 07, 2000 at 18:04:38:
Ricky,
Bill’s advice (the other Bill) is the best. If they won’t listen to reason and are not intimidated by your legal position, let them out…unless you are willing to go to a lot of time, trouble and expense. And remember that you’re not “losing” $35K, you’re just losing the opportuntiy to make it on this deal. If you do get them to court they’ll just claim emotional duress and psycological incapacity anyway…and you’ll end up being the bad guy.
Bill
Re: The Questions To Ask Are… - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on September 07, 2000 at 18:02:55:
Rickey,
Are you telling me you’ve already got $25-$35K in this deal that you stand to lose? How did that happen? What was this money for?
If you have that much in it, I’d certainly fight to enforce the contract OR get my money back somehow. Forget the “Mr. Nice Guy” stuff I wrote in my last post. ;o)
Bill K. (AZ)
Re: The Questions To Ask Are… - Posted by Rickey TX
Posted by Rickey TX on September 07, 2000 at 20:08:29:
I have not put any money into it, but I could have possibly made that much off the deal after all was said and done.