Posted by Eric C on August 27, 1999 at 18:16:40:
Hi -
I’d just second what Bud told you about community property in TX.
One other note, if the Title Policy was issued under fraudulent circumstances – the policy will not cover your losses. Trust me on that one - I found out the hard way.
Good luck.
do i just have cold feet? PLEASE HELP ASAP!! long - Posted by steph in tex
Posted by steph in tex on August 27, 1999 at 08:06:30:
here’s the skinny:i did a mail out to all the posted foreclosures for sept7. guy calls me up desperate.wants me to buy him out. he just needs the cash HE has just spent to replace the ROOF-5K–his loan payoff is about 40K–no
problem–BUT-he just listed with a RE.
i told him to call and see if he can exclude me from listing or i won’t be able to help him unless he withdraws the listing(i am NOT dealing w/agents this month!).
no sign or anything in the yard yet when he had called me to the house. we went ahead and signed a contract for 45K.
i tell him contract is contingent on getting me excluded, or ditching the agent–(although i am prepared to pay the agent his 3% is push comes to shove)fine. he calls and says no more agent. fine. i set up my hard money loan, take the stuff to the title co, and record a memorandum of contract etc. here’s where it gets strange. i am also trying to find a staight loan in the hopes that my request for an extension will get approved. while i’m talking to bill(my loan guy) he asks who i’m buying from–i tell him, oh just some poor guy in FC. i tell him the name–WHOA!! he knows this guy–says he’s come to him before claiming to be an investor, tons of lies on his app, claimed to own no property etc etc. basically, bill is telling me to be very carefull. i kinda blow it off, because this is a good deal–45K FMV 85K just needs paint. i keep going right? right. then title co calls me–the only thing he has recorded is a quit claim deed, and they need a waranty deed to issue title ins.–SH**.–ok–we can handle this one–talk to the guy again–he says that a WD was done when he was trying to refi with mort co X. call mort X they do have a War deed, but they are reluctant to give it up–basicall this guy has been riding on the person he assumed the loan froms credit–the lady’s now the one being foreclosed on and they think i should try to track her down. ARGH@^#@!$!$–fine–i call the title co, explain this–they say no big deal-they will handle it. they do. they get the WD. Whew! it’s all good now right? not so fast–the title co calls me the next day, there is another lien on the prop–1550–ok–i say-so-it comes out of the guys proceeds-yes–mary says, but wait–she talked to the guy with the lien–he says he offered my seller 72K 2 weeks ago. i am feeling my heart sinking. he also tells mary (title c) that the guy has an agent–mary ask-steph-is there an agent?–i feel sick–i explain the deal to mary and tell her the listing is WD and there is no sign in the yard–my RE friend says it’s no longer in the mls. she ask-well why wouldn’t this guy have taken the 72K?
how am i supposed to know? i am trying to think fast–i haven’t spent much money–since the guy won’t get me keys to let the appraiser in–so i’m thinking bail out right?–no i think maybe i can still make this happen-i ask mary for the guy with the liens number. i call him and ask him if he is still intrested in the prop for 72K? he thinks yeah maybe–but he wants his 1550 for replacing the roof!!–and he needs to talk to the wife. but he has a mouthfull to say about my seller. he says the seller told him that he was a RE and had lots of work for him --if he gets a good deal on the roof-then he never pays the guy! and this is what he told me he’d spent all his money on! i’m very sceptical and haven’t mentioned to my seller that i know any of this-- he called yesterday and asked if he can stay in the property for 30 days after close-- he says he needs time to move. how do i get him out if he says in the place?! PLEASE HELP ME GANG!! I’M GETTING COLD FEET!!
There’s money in this deal–but i’m afraid of all the potenial liabilities. everyone seems to have heard of this guy. what do you all think? i don’t want to get sued. we are scheduled to close on the 2nd, and i am trying to get in with the appraiser today… what should i do??
please help me with this one guys–any advise please
thanks
steph
stupid question - Posted by Laure
Posted by Laure on August 27, 1999 at 23:44:10:
where are the foreclosures posted? Here, they list them in the newspaper, but is there a better place to find them??
Thanks all…
Laure 
Re: do i just have cold feet? PLEASE HELP ASAP!! long - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on August 27, 1999 at 10:38:38:
Is the contract assignable ?
Maybe you can assign the contract to the roofer for say 10-15k, and get out of the deal clean. Yes, you will make more money if you buy it at 45k, then sell it to the roofer at 72k. But you would save yourself time and hassle assigning the contract.
Just my .02
Re: do i just have cold feet? PLEASE HELP ASAP!! long - Posted by B.L.Renfrow
Posted by B.L.Renfrow on August 27, 1999 at 10:24:06:
What a story! Don’t know whether I ought to laugh or shed some tears for you.
Keep in mind I’m not quite a pro at this yet, but…
I don’t see anything that would make me run away just yet (maybe make a couple visits to my friend Jack Daniels, but not bail immediately).
So your guy is in there on a warranty deed, which title company has verified, on a subject-to loan, which is being foreclosed, right? Biggest problem I see is just getting rid of the guy. I don’t see any risk of you being sued. As long as title company is OK with the deal, and heck, you might even have a buyer and $27k profit, I’d keep on it.
Now, how do you get rid of him? Well, sounds like this guy is chronically short of cash, so he no doubt wants the $5k. So…NO CLOSING until he’s out and you can inspect the inside. Just remind him if he stays and it’s sold in foreclosure…no $5k! NO WAY on Earth would I consider letting this guy stay a minute after closing…or you’ll never get him out.
I would also call the agent and find out whether the listing is actually withdrawn. If not, just let the seller pay them the commission out of his $5k (which is now down to $2100 cash to him; $5k minus $1550 lien minus $1350 commission).
Needless to say, anything and everything this seller tells you is suspect and will need to be verified.
Good luck and keep us posted. I want to hear the rest of this one!
Brian (NY)
Re: do i just have cold feet? PLEASE HELP ASAP!! long - Posted by JPiper
Posted by JPiper on August 27, 1999 at 10:04:42:
There’s an old saying in real estate “All buyers are liars”. A number of years ago a lender and I were laughing about this one?.and modified the saying to “all buyers are liars?.and sellers too.”
Now maybe that’s a little cynical?.and really there’s no reason to ASSUME any particular person is lying or not lying. Really whether someone is telling the truth (other than you of course) is completely irrelevant to the transaction. If truth were the standard, then we would have to wheel a portable lie detector machine out in the morning so that we could evaluate the statements of all our buyers and sellers.
Instead, we ASSUME nothing. Instead, we do DUE DILIGENCE. We make every effort to uncover all the important details about a deal. So in the course of doing a deal we don’t rely on someone else’s statements regarding value?..we check out the comps on our own. We don’t rely on their statements concerning liens or ability to transfer good title?.we have the title company check the title, and give the conditions under which they will issue title insurance. We don’t rely on disclosure’s or seller statements regarding the condition of the property. We evaluate the condition for ourselves?.paying careful attention to the areas that would be expensive to repair?.like perhaps the foundation, the roof, etc.
The next thing is that you don’t make agreements without thinking through the consequences. Agreements that allow people to occupy before they have closed are mostly a mistake for a lot of reasons. Agreements that allow the seller to remain in the house after closing are a mistake as well. Never say never?there may be a situation where one of these would be appropriate?.but you should resist this like the plague.
Here’s what you trust: You trust your ability to do a competent evaluation of the details of a deal. Whether the seller is honest? I’d love to be dealing with honest people all the time?.but unfortunately that doesn’t jive with reality. People lie, distort, exaggerate?..all of which is geared toward throwing you off your mission?..determining the true nature of the deal.
Understand something. YOU have no agreement with the Realtor. IF an agreement exists it exists between the Realtor and the Seller. Any commission that may be due will be due by the Seller?and will be due from the proceeds of the sale (if the Realtor discovers this). Later the Realtor can sue the Seller for the commission?.and may well do this if they haven’t released the property from the listing agreement or excluded your name from the listing. Just make sure that you are doing nothing that could be construed as tortious interference with a contract. In my state, some brokers can record a mechanics lien against a property for certain kinds of commissions?..but generally not residential deals. That’s something to check though in your state.
In terms of the listing agreement I would have a document signed by the seller, in which he represents that he has spoken to the realtor, and that the realtor has excluded your name from the listing. I would add that the seller agrees to be responsible for any future commission arising from your transaction. Get something down on paper.
I would factor into my equation the possibility that if you don’t agree to permit the seller to stay in the property, that it’s possible he may refuse to leave?.that you may need to evict. No big deal?.another hurdle. He may also balk at closing?.so may sure your paperwork is in order?.and that you are complying with the contract.
Finally, I don’t generally confront people like this with the fact that I know they are not telling the truth. The reason is that it’s to your advantage to know this guy is a liar?..but he doesn’t know you know. Once he knows you know?..that will change the way he responds to things?.and he will become less predictable. At least this way you know he lies?and therefore he’s predictable and you know what to do?.check every statement out.
Good luck with the deal.
JPiper
Re: do i just have cold feet? PLEASE HELP ASAP!! long - Posted by Bob-Tx
Posted by Bob-Tx on August 27, 1999 at 09:27:34:
Steph-
I may be naive, but I’m not seeing any deal-killers here. I will say there are a few things about your post that give pause… What’s the big deal about the realtor. I would just suggest being very careful about suggesting to a seller that they bail out of a listing agreement. I know realtors tend to muddy up an otherwise clean transaction, but if the seller has listed the property and you come along suggesting he un-list you could open yourself up to several reprocussions, mostly unpleasant. In this case, why not contact the agent and let her/him know of your restlessness about this guy…see if the agent knows anything. You might consider 3% cheap if they could placate your fears right now.
If the title company is OK with the title and will insure I don’t see the problem there.
Is your seller a liar? Well, sounds like it, but where does it say in any of your tapes and books that good deals only come from honest upstanding sellers. You might consider, next time you talk to this guy, letting him know you know a bit more about what’s going down.
You’ve got a contract and its recorded, what more do you need from him anyway?
No way do you let this guy hang in the house. House to be vacant prior to closing.
The roofer adds pizzazz…how nice to have a prospective buyer at that price. Stay close to him.
Don’t let go yet…
my .02
Bob
Re: do i just have cold feet? PLEASE HELP ASAP!! long - Posted by Art
Posted by Art on August 27, 1999 at 08:35:37:
There’s a big difference between getting cold feet and knowing when to cut your losses and move on
As long as the title co has done a complete search
you shouldn’t worry about being sued.
With this guy’s history of lies if he wants to stay in the house 30 days he could try for 90 this would tie up your money and delay your plans for the property, if you had to take legal action to remove him.
My gut feeling run away don’t walk get out as soon as possible there are plenty of good deals out there waiting for you
You don’t know how many lies this guy has told and to who, they could all come back to delay this deal for you.
Re: do i just have cold feet? PLEASE HELP ASAP!! long - Posted by steph in tex
Posted by steph in tex on August 27, 1999 at 17:34:57:
thanks again. i didn’t even think to put something in writing about the realtor–that’s the smartest thing i can do at this point. thank you for pointing that out–DAH!! sometimes you just need push me into the brick wall. i think you’ve (once again) made many great points here JPiper–i think many people will get alot out of this post. thanks for all you do.
i believe i have my i’s dotted and my t’s crossed. i will definately get something in writing about the realtor. i am going to require the property be vacant by closing. if he wants the cash–he’ll leave. i totally agree with not letting him know i’m on to him. i would be really uncomfortable with this.
i’ll keep you guys posted!! thanks to all for the great response and advise!!
thanks Bob-- i needed to hear that! - Posted by steph in tex
Posted by steph in tex on August 27, 1999 at 09:53:25:
i forgot one thing-- the guy has told me that he and his wife have just split. am i at risk here? she is not on the deed–but does she have right to this property? even though it’s in foreclosure? can she callenge my purchase? or worse–my sale? i have not seen or heard from this “wife”…if he even has one…@&$!$#$@^%$! thanks
Texas is community property - Posted by Bud Branstetter
Posted by Bud Branstetter on August 27, 1999 at 13:59:01:
Steph,
The husband can not sell his wife’s half even if she is not on the warranty deed. Unless the guy lies to the title company that he is not married they will not insure it. Even if they did it would cause problem. A good divorce attorney would look out for the wife’s interest and into court you go even after your sale.
how do i find out…if - Posted by steph in tex
Posted by steph in tex on August 27, 1999 at 17:26:10:
if this wife really does exsist–if they were really married and if they are really divorced? none of this will come up? doesn’t the title co do a name search etc etc that would reveal if a person is married? how would you proceed?