Posted by JoeKaiser on June 17, 2000 at 17:04:33:
You’d think.
However, the contract already said “as is,” and when they signed the agreement they sent it directly to the escrow company with instructions to close the sale.
Joe
Bank reneges on REO sale to me. What can I do? - Posted by Ron (MD)
Posted by Ron (MD) on June 16, 2000 at 19:00:37:
I had a contract to buy an REO. I had given the seller a full price offer and $1,000 earnest money. They accepted and settlement was scheduled for today.
Their title company faxed me the HUD-1’s yesterday and I was ready to go. Today, their listing agent told me that the sale was on hold, indefinitely.
It seems they had an earlier contract. They felt that the first buyer had failed to fulfill the contract (although there was never a formal release). The bank re-activated the listing. I bought it.
Now the original buyer says he has been moving toward settlement and blames the seller for the delay and that he is recording something at the courthouse to cloud the title to prevent my purchase.
The agent says the bank expects to go to court with this earlier buyer, but will not sell to me in the meantime. I told the agent that she should tell the bank that they can expect to also go to court with me.
What can I really do about this? (I was looking at a $20k rehab profit on this $60k ARV house.)
Thanks.
Ron
Another angle to work at the same time… - Posted by ScottE
Posted by ScottE on June 17, 2000 at 12:24:54:
Ron,
There’s an old saying, “You have to pick your battles”. Believe me, I am not one to shy away from a fight, but I there may be a relationship with the bank you could form and, depending on how many REOs you think they run through their place, it could be worth considerably more in the long run than just on this one deal.
I’d go ahead and file a lawsuit as Piper suggests, then go to the bank and make a deal to ‘go away’ with your lawsuit provided they let you have first crack at any REOs they have coming down the pipe.
This process may involve throwing the RE agent under the bus, but if he/she deserves it, so be it.
Besides the tremendous legal expense you will probably have to come up with, you may come out smelling like a rose rather than just another guy suing them. And if the deal falls through with the first guy, who do you think they are going to call?
Good luck
Scott
Piper is right (what else is new?) but one more thing to add…(long). - Posted by Ben (NJ)
Posted by Ben (NJ) on June 17, 2000 at 11:18:59:
Jim is right when he says that NOW every clause in your contract will be microscopically scrutinized to see if you adhered to the letter of the agreement. It is also a good idea to CONTINUE to adhere to the letter of the agreement so you don’t provide them with any more ammunition to get out. In other words, tender any upcoming deposits,etc just as if there were no dispute, send everything EXACTLY as the contract specifies, no shortcuts, no oral changes, everything certified mail etc, (even if they send it back). I was recently in a similar position (as seller), I was in contract to sell a property with buyer number one, while in contract I received another offer twenty-grand higher from buyer number two. I patiently waited for buyer number one to make a mistake and guess what, his 10% deposit did not get to my attorneys office on the specified day and at 5:01 PM I declared him in breach, killed the contract and accepted offer number two. I was not exactly proud of it but I was certainly within the terms of the contract. This is what you can expect now that you are playing hardball.
Re: Bank reneges on REO sale to me. What can I do? - Posted by SCook85
Posted by SCook85 on June 17, 2000 at 08:21:19:
Ron,
In response to Jim Pipers post below. I would also recommend recording the contract if you can. The other buyer involved tried to do so and could not because he had a copy of the contract and did not have original signatures. His attorney advised that he keep trying to record it, but on his second attempt he was told “absolutely not”.
I can not think of a single time that I have ever had a contract with 2 original signatures while dealing with a bank, so this may be tough to over come.
Does anyone know of another way to cloud the title?
Happy Investing!
Steve
Re: Bank reneges on REO sale to me. What can I do? - Posted by JPiper
Posted by JPiper on June 17, 2000 at 06:20:52:
File a lawsuit and record a lis pendens. That property is going nowhere.
Something to understand here is that despite the fact that the bank entered into a contract with investor #1, this has NOTHING to do with whether your contract is enforceable. Right now, you don?t even know if investor #1 will file anything. But you have a contract with the bank, and the way to enforce it is to file suit, and record a lis pendens blocking any sale until your lawsuit is resolved.
Understand a couple of things. Your contract is going to become a central focus. The lawyers are going to look for loopholes and/or discrepancies. So you want to weigh the contract with your attorney. Make sure you complied with all of the provisions of the contract?..because in the end, the success of your suit will depend upon on that.
Count on the BIG LIE, as Kaiser mentions below. Chances are the listing agent will lie to save her skin?.along with anyone else who may have a part in this.
Don?t expect this to be resolved in the next couple of weeks. These things have a way of dragging on. You may end up with the property, or you may end up by collecting damages. If there is a problem with your contract, or with how you acted in accordance with the provisions.?you?ll lose.
Personally, I?d file the suit. If you don?t, there will be some people around who will know that they can walk from a deal with you.
JPiper
Also, the other buyer already had the home sold to another investor. He lost a $7,000 payday! nt - Posted by SCook85
Posted by SCook85 on June 17, 2000 at 24:18:58:
nt
Re: Bank reneges on REO sale to me. What can I do? - Posted by SCook85
Posted by SCook85 on June 17, 2000 at 24:15:50:
Ron,
I’m familiar with the deal. I know who the other buyer is and told him as soon as they tried to pull out with him that they had a big problem on their hands. I knew he was going to sue, and I knew that the new buyer was probably going to sue. You are both in the right, it will be interesting to see how they handle this one.
I think the problem is a renegade listing agent, I here her actions were not quite on the up and up either. She will probably be dragged into the lawsuit.
By the way, it was the banks fault as to why the other buyer could not settle in time. It is going to be interesting to see how this one comes out. I’ve been keeping close tabs on it.
Steve
HERE’S WHAT YOU DO! - Posted by Guido S
Posted by Guido S on June 16, 2000 at 19:59:26:
Sue for “Specific Performance” You will prevail (BIGTIME)
Who do these banks think they are anyway?
Guido S
Exhibit A . . . - Posted by JoeKaiser
Posted by JoeKaiser on June 17, 2000 at 20:55:21:
The way to record documents where original signatures are required and you only have copies?
Record a Notice of Agreement or (whatever you choose to call it - there’s your original signature, by the way) and not coincidentally, copies of the contract are attached as Exhibit A.
Just let them try to tell you “absolutely not.”
Joe
Re: Bank reneges on REO sale to me. What can I do? - Posted by JPiper
Posted by JPiper on June 17, 2000 at 08:59:59:
You should be able to record a memorandum of contract. However, this isn’t foolproof necessarily. A lis pendens is the best way, which would typically require a lawsuit to be filed first.
JPiper
Another angle to work at the same time… - Posted by ScottE
Posted by ScottE on June 17, 2000 at 15:30:07:
Ron,
There’s an old saying, “You have to pick your battles”. Believe me, I am not one to shy away from a fight, but I there may be a relationship with the bank you could form and, depending on how many REOs you think they run through their place, it could be worth considerably more in the long run than just on this one deal.
I’d go ahead and file a lawsuit as Piper suggests, then go to the bank and make a deal to ‘go away’ with your lawsuit provided they let you have first crack at any REOs they have coming down the pipe.
This process may involve throwing the RE agent under the bus, but if he/she deserves it, so be it.
Besides the tremendous legal expense you will probably have to come up with, you may come out smelling like a rose rather than just another guy suing them. And if the deal falls through with the first guy, who do you think they are going to call?
Good luck
Scott
Re: HERE’S WHAT YOU DO! - Posted by JoeKaiser
Posted by JoeKaiser on June 16, 2000 at 21:15:39:
I had nearly the same thing happen to me. Bank foreclosed and accepted my offer on their REO . . . and they pulled the plug at closing.
They had agreed to give the owner an extention on his foreclosure sale date, but forgot about it and held the sale anyway. They now felt they had to honor their agreement with him, at my expense (already had the thing resold). I still believe they just wised up and figured they’d sold it too cheap to me.
Anyway, I sued for performance and lost. The president of the bank, who was the only one I dealt with in this transaction, simply told THE BIG LIE (briefly, they claimed that by writing “as is” in the property description, they had in fact not accepted my offer but rather, had created a counter offer that I did not respond to and therefore, did not accept . . . this was silly. They’d signed the thing, hadn’t checked the “counter offer” box on the form, and worked with the escrow company right up until the last moment,etc. There was never any question that the contract had been offered and accepted.) and that was enough to convince the judge.
As long as there exist clever lawyers and clients who won’t hesitate to lie whenever the need arises, there are no slam dunks in the courtroom.
Joe
Re: Exhibit A . . . - Posted by SCook85
Posted by SCook85 on June 17, 2000 at 22:08:08:
Joe,
Sounds good to me! I’ll have to add that one to my arsenal in the event I ever come across that situation.
Happy Investing!
Steve
Re: HERE’S WHAT YOU DO! - Posted by Ben (FL)
Posted by Ben (FL) on June 17, 2000 at 07:50:44:
Joe,
My wife is an attorney. Even though she practices in criminal and civil defense, she does know about contracts, especially now that we are into REI. By writing “as is” on the contract, they substantially changed it, whether they checked a box or not. If you had intitialed the change and sent the contract back, you would’ve won that case.
Of course, you’re right, they changed their minds. But the contract didn’t say anything about intent. When it came time to renege, their attorney found the loophole you left them by not acknowledging their change to the contract.
Re: HERE’S WHAT YOU DO! - Posted by Laure
Posted by Laure on June 16, 2000 at 22:28:19:
That’s almost unbelievable… I’ll bet they golf together ! Slime bags.
Laure 