Jim:
I really do appreciate your candor. I’ve re-read my contract and I jacked myself up on this one. There is no mention of access to the property for inspections, etc. My brother is an attorney in Texas, but would prefer not to be messing with Oklahoma statutes. Besides, RE is not his forte’.
I don’t know if I have any legal remedies or implied relief to gain access to the property, but I’ll investigate that after the holiday…I think the sellers may get a little nervous if I put them ‘on ice’ for a few days.
If I can get them to buy me out of the contract for $1500-2000, should I do it under the circumstances and just move on to the next deal with knowledge in my pocket?
I feel like Edwin Moses I’m having to jump over so many hurdles on this deal!!
Problem: I grabbed wrong contract to purchase a 4-plex and it didn’t state that I could have access for inspections, etc. I want to try and flip/assign the property, but the sellers are being real pains now and possibly greedy seeing that I can make 5-6k more than I contracted with them for.
They have told me that they don’t want me to show the place to any other prospective buyers and that they won’t facilitate the showing of the property. I just had a hot buyer on the property yesterday and had found out who the sellers were, called them and the sellers told the prospects what I had it under contract for, so they tried to beat me up on price.
What should I do with respect to continuing to show other prospects?
Posted by JPiper on November 25, 1998 at 12:18:33:
Understand that I’m not a lawyer, and I have not seen your contract.
It would be a rare contract that did not provide the ability to inspect the property, and provide some type of contingency based on this. IF yours doesn’t, shame on you. You successfully saved money on one of the most important elements of a real estate transaction…the contract.
Assuming the contract gives you the right to inspect, then the seller would be breaching the contract to not permit entry for the purpose of those inspections. What I would do is to have people drive by the property to check out the exterior. I would provide them with the numbers on the building. If they’re interested, I would write up a deal with them subject to their inspection and approval of the interior of the building.
On the day of the inspection, I would have these people come in to inspect. You could sell it to more than one buyer by using backup contracts.
On the day of the inspection, if the seller didn’t permit entry, I would immediately record my contract, thus clouding the title, and then turn the matter over to my attorney after an explanation to the seller about what is about to befall them.
Now here’s the real question. Is this all worth $6K?? Probably not. Sounds like you’ve got a very skinny deal, that you put together incorrectly. If you lose the deal it will have cost you very little to achieve some education. But I would try the above first. On the next transaction, get your ducks in a row.
Posted by Redline on November 25, 1998 at 11:01:53:
Scott - I hope you didn’t forget the other CYA clauses you should have that will allow you to back out if you can’t find a buyer, or for some other reason.
Jim:
Thank you for the posting. I realize I screwed up and may take it on the chin (loss of $500 earnest money), however, I suppose it may be a cheap lesson.
On the other hand, 6k may not seem like very much money to you, but if you don’t have it, it means quite a lot. So, I’ll try and salvage what I can and continue to gain some positive knowledge from this experience.
Posted by JPiper on November 25, 1998 at 12:53:37:
Scott:
I’m hoping you did not misinterpret my post.
While I haven’t seen your contract, surely there is something in it regarding inspections. What is that? If the seller is preventing an inspection of the property they are probably guilty of a) breach of contract b)tortious interference with a contract.
The two above give you a cause of action. Certainly NOTHING in this would necessarily require the loss of your earnest money.
I did not intend to make light of $6K. My point was that in the area of real estate $6K is a VERY small amount of money to compensate for some of the risks that you take. In this case, you might be able to protect this situation legally, but an attorney is going to inhale that $6K quicker than you can imagine.
I wasn’t suggesting that you give up. I was suggesting a course of action outlined in my post. I was also pointing out the problems with that course of action. But the point remains…what does your contract say about inspections??