About to be stiffed by Wannabe Investor - Posted by NJDave
Posted by NJDave on May 08, 2000 at 11:02:15:
A newbie/wannabe Investor went into contract ($125,000) to purchase a foreclosed, but not yet REO single family dwelling via an acquisition strategy outlined on these REI boards. The method was not suitable for this particular acquisition, and I suggested that the Investor engage my short sale administrative services and seek a short sale.
It was agreed and we entered into a Contract For Services. I was to be paid my Fee in installments, the final installment due upon foreclosing lienholder’s written approval for the short sale.
It was agreed and understood that as I pursued a short sale approval from the foreclosing lienholders, the Wannabe Investor would attempt to market and flip the subject property via an assignment of approved short sale contract, or via a simultaneous closing.
Aware that the Newbie’s real estate experience and acumen were limited, I assumed the role of a 'coach’
and agreed to ‘walk the Investor Wannabe’ thru the complex and time consuming deal.
Long story short, about 10 days ago the Wannabe Investor was provided written short sale approval from the foreclosing mortgagee(s). The Sale price that was accepted by all parties was roughly $40,000 less than the original contract price of $120,000. The simultaneos closing (The Flip) has been scheduled for later this month.
At this point in time, I am due the balance of my fee for having completed my contractual responsibilities.
Now that the Service has been rendered, my Client has refused to pay as contractually agreed and instead has offered to pay me from proceeds of the simultaneous closing to a third party.
I think that I have two choices: (1) Allow the deal to close and hope that I’m paid from proceeds, or (2) I am inclined to skuttle the deal. One call from me to the foreclosing mortgagee and the short sale approval letter will be rescinded, the deal dead.