I need immediate advice on a tough situation - Posted by Joi Hall

Real Estate Investing Real Estate Law
1

Posted by BTI on December 22, 2006 at 24:28:40:

Joi

Before you get into the other stuff, contact the bank directly and inform them of how you were conned and ask about buying the house and see about working out a deal. AS for the scam man put him on the back burner for a little while, but I would gather as much information about him as you can in the meantime.

BTI

2

I need immediate advice on a tough situation - Posted by Joi Hall

Posted by Joi Hall on December 20, 2006 at 16:21:44:

I am a wholesaler and I had a seller sign a purchase and sells agreement with me in which I then assigned the contract to my end buyer. Prior to the seller and I signing a contract I asked him several times if he was the owner of the property or if he was wholesaling the property. He told me several times he was the owner. Once I sent my contract and my buyers assignment to my closing attorneys office my attorney called me to say they could not find the deed in the sellers name or his company name. The attorney contacted the seller several times, as so did I, and he continued to say he was the owner but that the deed had not been recorded yet. Long story short, I finally got it out of him (days later) that this was going to be like a double close, he didn’t own the property yet, the bank did. He was buying it from the bank, and we would close with him a day later (pittsburgh, PA makes it difficult to do a back to back close). The day he was supposed to close with the bank, he says that the bank discovered 15k in back taxes on the property and the bank wouldn’t sell it to him unless he paid the back taxes. He says that in his contract he wasn’t supposed to pay any back taxes. So then, myself, and my buyers on my end told him that we would all pitch in and help pay the back taxes so the deal could close. So then, the seller now comes to us today to say that the bank won’t sell the property at all now. They are completely backing out of the entire contract and even if the seller pays the back taxes they won’t sell it. They are going to put the property back on the market for double what they asked initially so that they would make a profit off the house. So now I have incurred fees with my closing attorney trying to find a deed that was never there and pulling title. My question is:

  1. Should the seller be responsible for paying my incurred fees since he lied and said he owned the property and never did?
  2. Can a bank legally back out of a contract without a clause in the contract to do so, and would they do something like that? The seller claims his attorney went through his contract with a fine comb and the bank can’t legally back out of it, but the seller is saying that it isn’t worth him fighting the bank to go through the transaction. I don’t even think he had his attorneys write the bank a letter.
  3. What should I do in this situation and can my end buyers sue me for anything?

Joi

3

Re: I need immediate advice on a tough situation - Posted by Gary-ORE

Posted by Gary-ORE on December 22, 2006 at 17:10:47:

Typically, you would have recourse against the “scam-man” and he would have recourse against the bank (assuming what “scam-man” is telling you this time is even correct- don’t forget he already has a history of not disclosing the truth to you as it is). I would agree that your best solution may well be to contact the bank directly. The problem is that I will bet you they already have a buyer at a much higher price, this is what caused the whole pyramid to crumble. LOL