Posted by Tim on November 05, 1999 at 07:47:36:
As a matter of course. I always file a memorandum of interest. I hit the recorder on the way home if I have to. It’s a $10 insurance policy!
You’ll get an intersting phone call or two if it gets nasty but it’s held true time and time again for me.
(Check your state laws first. I know it works in UT and should in most TD states)
Stick to your guns… and make it worth the time you put into it (but don’t waste any more).
Good luck!
Tim
Seller tries to back out. - Posted by Eric IL
Posted by Eric IL on November 04, 1999 at 01:22:51:
I have a contract with a seller that the seller wants out of because they recieved a better offer after they signed my contract. Can anyone help me on how I should handle this? This is what is involved… I would take over the payments on the property. They pay $300 a month and rent it out for $650 a month. The other offer(after I had a contractwith the owner) was at the end of the year the buyer would give them what they owed plus one years rent. I was wondering how to approach this? thanks,Eric
To the Seller who wants out… - Posted by Eric C
Posted by Eric C on November 04, 1999 at 23:47:44:
… I would say, How much is that worth to you?
Hi there Eric -
In the last few years, most of my property deals have dealt with commercial property, not with residential. But here goes anyway.
In my contract, I usually get a clause inserted that allows me to charge a seller should they want out of the deal at a later time.
In commercial deals, this clause is titled a “kill fee” and on the residential deals it’s a “release clause”. The wording may be almost identical(the calculations are different), but somehow those titles convey very different meanings to their respective audiences.
Does everyone go along with this? Of course not, but if they don’t then their refusal gives me something else to bargain with. But I have to say the majority do sign the contracts with these clauses.
Every once in a great while, it becomes an issue. Almost every time, the seller has continued to “shop” the property after the contract was signed. This clause makes sure that I get paid either way.
If the deal is worth me getting involved in, then I insist on getting “paid to play”. And sometimes, the “Kill Fee” is good enough. Really.
Just my 2 cents,
Eric C
Re: Seller tries to back out. - Posted by Redline
Posted by Redline on November 04, 1999 at 12:13:39:
Both Phil’s and Jim’s advice is good. I would just like to add that suing for specific performance is a REAL, real pain and something you really don’t want to get involved in if you don’t have to.
Threaten them with it, and if all else fails take some cash (as Jim said) and walk.
Good luck and keep us posted!
RL
Let The Seller “Buy” You Out. - Posted by Jim Kennedy
Posted by Jim Kennedy on November 04, 1999 at 10:38:29:
Eric,
I totally agree with the Phil’s advice. After you have done that, you might consider letting the sellers buy you out of your contract so they can proceed with the better offer they received. You may want to simply “walk away” and relinquish your position if the sellers makes it financially attractive for you to do so. Of course, if you would rather keep the deal, ultimately you may have to sue for specific performance. Seek competent legal advice. You will want to make sure that your original contract with the sellers was drafted in such a manner that it will be held to be enforceable by the court with appropriate jurisdiction.
Hope this helps.
Best of Success!!
Jim Kennedy,
Houston, TX
Re: Seller tries to back out. - Posted by phil fernandez
Posted by phil fernandez on November 04, 1999 at 08:23:23:
Eric,
If you have a legally binding agreement, cloud the title by recording a memorandum of agreement. If your seller trys to sell to the other party, a title search will indicate that there is a cloud on the title with your memorandum and no title insurance can be issued because of it.
Also a certified letter from your attorney mailed to the seller might help.