I hate (most) attorneys - Posted by Joe

Real Estate Investing Real Estate Financing
1

Posted by Joe on August 01, 2003 at 09:37:50:

Johnboy,

My attorney calls me back late yesterday afternoon (8/1/02)and says the bankruptcy attorney called him and said if I can get a letter from the bank stating that they are willing to do a discount deal AND what they need from me to begin is a signed sales contract then my attorney says the bankruptcy attorney won’t oppose the deal.

My attorney says if I get the letter he’ll take it to the bankruptcy attorney and personally see to it that the bankruptcy attorney follows through on his word and contacts my buyer advising him the deals OK. I’m sure he’ll bill me for it too!

CAN YOU BELIEVE THIS SOAP OPERA?

I already have a relationship going with the bank’s mitigation person and I believe they would write me a letter stating the things they would need to do a discount deal with me included of course in the list would be the signed contract. What do you all think?

My thinking at this point in time is that I will follow through if not for anything else for some laughs and some more material for the most bizarre real estate tale ever told!

What do you all think?

2

I hate (most) attorneys - Posted by Joe

Posted by Joe on July 31, 2003 at 12:28:49:

I?m a newbie. I live in Ohio and I hate attorneys.

I just had a bankruptcy attorney kill a deal I had put together.

Here are my questions:

  1. Why would a bankruptcy attorney advise a client, after the bankruptcy was over, not to sign a sales agreement to sell their house ???an agreement that in the end could prevent his client from sustaining a foreclosure? What possible reason would the bankruptcy attorney have for giving this advice?

Note: I showed the seller my letters to the bank and their reply saying that in the case of a discount to me that the bank would ?waive any possible deficiency judgement against the borrowers?.

  1. If the seller signed a sales agreement as described below would the seller somehow be negating his recent bankruptcy or be putting himself in some other legal jeopardy.

Note: My attorney says no but neither he nor the bankruptcy attorney has any real estate experience. What are your opinions?

  1. Do I have any recourse against the bankruptcy attorney for putting a wrench into the middle of this deal??

  2. If this should come up again how can I avoid an attorney killing the deal if he advises my seller to sign nothing? I hesitate to advise a seller not to talk to their attorney yet most attorneys know nothing about real estate. What do you all do about this kind of thing?

  3. Are there any bankruptcy attorneys out there (who know something about real estate transactions) that are willing to answer some of these questions for me ??

Here are the details my friends. I know it sounds like a soap opera, maybe even a country western song but its all true.

I met a seller who had just completed a chapt. 7 bankruptcy for himself and his wife. The bankruptcy was complete, final, discharged several (3) months ago.

The seller?s house was about to be foreclosed due to the bankruptcy. The seller chose not to reaffirm the house. I don?t blame him. The house at best is worth $100,000 and he owed (before chapt. 7) $150,000.

I approached the seller about buying the house from the bank at a discount. In order to do this I explained I needed to have a signed sales contract with the seller to buy the house. I explained to the seller that the signed sales contact would allow me to negotiate a discount directly with the bank. I also explained the offering price on the contract would be very low say $50,000 and from there I would negotiate price with the bank. I also explained the seller would get no money at closing but would be able to avoid a forclosure.

The seller was so misinformed that he believed he was no longer the owner of the house because he had gone through bankruptcy. I explained that until foreclosure was completed, he was still the owner AND he had no obligation to pay the note since he had gone bankrupt.

I asked him to sign a permission slip that would allow me to talk to the bank about his loan. He had no problem with that and signed the slip. I gave it to the bank and talked to the loan mitigation person. I explained I was ready to do an all cash deal and close in (30) days or less for a discount. The mitigation person said they were was willing to do a discount. The mitigation person also explained that they first needed to see a signed sales contract to begin the process.

I then asked the seller to sign a sales contract and the seller said he would but needed to talk to his attorney first.

Note: I also told the seller about the 1099 that the bank would issue to him stating the difference between what he owed and the eventual discount price. I was completely honest and up front with the seller. I also explained that since the seller had lived in the house for at two of the last five years so he would owe no taxes on the gain.

The seller then talks to his attorney, his bankruptcy attorney and his bankruptcy attorney advises him to sign nothing?absolutely nothing.

Not knowing the bankruptcy attorney?s reasons for that advice to my seller, I asked my attorney to call him and ask for the reasons.

My attorney gets with him and then tells me that the bankruptcy attorney has no problem with the deal I was proposing.

I am elated and call the seller and tell him his bankruptcy attorney has no problem with him signing the sales contract. My seller calls his bankruptcy attorney for confirmation then calls me back and says his bankruptcy attorney says AGAIN don?t sign anything.

I call my attorney and he swears that the bankruptcy attorney (a good friend of his) is not lying and did say he had no problem with the deal. Then my attorney says since he knows the bankruptcy attorney is honest then my seller must be lying to me.

To get to the bottom of it all I call the seller?s bankruptcy attorney and ask if I could set up an appointment with him, myself and the seller (I would pay for the appointment) to find out what if any his objections to the deal were.

The bankruptcy attorney refuse to speak with me about anything and just kept saying ?you have an attorney, talk to him?. I said I had and there is a discrepancy between what was being said. The bankruptcy attorney just kept saying ?you have an attorney, talk to him?.

I called him an unflattering name and hung up. What a soap opera!!!

As I had asked before:

  1. Why would a bankruptcy attorney advise a client, after the bankruptcy was over, not to sign a sales agreement to sell their house ???an agreement that in the end could prevent his client from sustaining a foreclosure? What possible reason would the bankruptcy attorney have for giving this advice?

Note: I showed the seller my letters to the bank and their reply saying that in the case of a discount to me that the bank would ?waive any possible deficiency judgement against the borrowers?.

  1. If the seller signed a sales agreement as described below would the seller somehow be negating his recent bankruptcy or be putting himself in some other legal jeopardy.

Note: My attorney says no but neither he nor the bankruptcy attorney has any real estate experience. What are your opinions?

  1. Do I have any recourse against the bankruptcy attorney for putting a wrench into the middle of this deal??

  2. If this should come up again how can I avoid an attorney killing the deal if he advises my seller to sign nothing? I hesitate to advise a seller not to talk to their attorney yet most attorneys know nothing about real estate. What do you all do about this kind of thing?

  3. Are there any bankruptcy attorneys out there (who know something about real estate transactions) that are willing to answer some of these questions for me ??

Thanks to all who reply,

Joe

PS One lesson I have learned: if at all possible don?t involve an attorney!

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Re: I hate (most) attorneys - Posted by JohnBoy

Posted by JohnBoy on July 31, 2003 at 20:38:11:

Why not just have your attorney call him back and set up the appointment with your attorney being present as well? If your attorney is friends with this attorney then there shouldn’t be a problem. He won’t talk to you, but it appears he has no problem talking with your attorney. So make it easy by just having your attorney call him and set up the appointment with everyone being present. Have the seller call his attorney and demand he do this as well, if they are really wanting to sell this.