Investor Implies I Committed Property Deal to Him - Posted by Elizabeth (NJ)

import · August 17, 2003, 7:36pm

Posted by Tony-VA/NC on August 19, 2003 at 10:51:05:

Elizabeth, this is not a comment upon the deal itself but a few words of opinion about your ethics concerns.

We all strive (or should) to deal above board and to protect our reputation. However, if you are dealing with someone whom it appears is less than honest, their opinion should matter very little to you. Conduct your end of the deal above board and move on.

Whether or not you did as you contracted to do, if this other investor wishes to say otherwise, he will. Chances are his reputation proceeds him. It sounds as if he may, as you suggested, be trying to prey upon your being new to this business.

We cannot control the opinions of others but we can uphold our end of the contract. I suggest you allow the contract and your actions to speak for themselves and let his opinion rest with him.

In time you may encounter his cronies but chances are you would not wish to do business their way anyway. If you do business with them, keep to your contract and they will have no factual basis for their gossip. Gossip is all that it is and you cannot control it. Do your deal and move onto the next. You are in business to benefit yourself (in a legal and proper manner) and not to cater to his opinion.

Let the contract dictate the reality of the business transaction.

Best Wishes,

Tony

import · August 17, 2003, 7:36pm

Investor Implies I Committed Property Deal to Him - Posted by Elizabeth (NJ)

Posted by Elizabeth (NJ) on August 17, 2003 at 19:36:38:

I had contracts to purchase two (2) separate properties from 2 different sellers. I intended to purchase one for my family and began the process of applying for a mortgage. The 2nd property I intended to assign (both contracts are written with me “and/or assigns” as buyer). Both of these properties came to me because the homeowners called my office and asked me if I would buy them.

An investor contacted me and said I’ll give you $2,500 up front and I’ll take care of you at the back when I sell it. I was in a financial bind and said OK to one specific property (the one I really wanted but my credit is crappy so no mortgage), & I agreed to prepare an Assignment of Contract for that property for the $2,500 he was offering. When we met at my office he brought a bank check for $2,000 & a company check for $500 and on the company check he had written "assignments x2. I prepared the Assignment of Contract, and we went to the seller’s home (I called ahead of course), where I explained to the seller why I was assigning the contract (because I couldn’t arrange financing), and the Assignment had a space for the seller to sign his approval which the seller did. I had also prepared another contract of sale because I inadvertently omitted the signature date from the original. The seller and I executed the contract again so all documentation is in place.

During the time period (several days), when we were discussing assigning the contract, he would make comments to me like “your contract is not valid” (although it certainly was) and “This is not the way I usually do business but I know you’re in a bind”.

I’ve been in business for many years (not real estate), and I know when I’m being hustled. Still, because of my immediate financial bind, I took his offer for the $2,500 because it was what I needed at the time.

Investor #1 keeps telling me what his plans are for the 2nd property, saying he will use it as an enticement to get another investor to buy another piece of property from him. We have not executed anything and I have not assigned the contract to him or anyone else on this 2nd property.

Here’s my dilemma: I have an investor I know who will take the 2nd property from me thru an assignment and pay me $5K this week for it. I know her and I trust her.

I never signed anything with the first investor for the 2nd property, and I did not verbally agree to give him the 2nd property as a gift. But based upon his statements to me and the note on his company check (“assignment x 2”), it seems obvious that either he believes that I did agree, or he is intentionally pushing me to assign the 2nd property to him, assuming I am so incredibly naive that I won’t question it.

I do not believe I am legally bound to him via the 2nd property and that I am legally able to offer it to my other investor.

You might ask why don’t I keep it myself: Because it requires extensive renovation and is a good fixer upper but is located in an area that is commercial & residential depending on which side of the lane you are standing on. I’m buying it for $40K and the comps say it’s worth (after fix up) approx. $100K. So I know it’s a good deal for someone.

Would you kindly advise if I am legally able to offer this 2nd property to my other investor. I appreciate your comments on this so that I can get this problem property off my back. Thank you.

import · August 17, 2003, 8:51pm

Re: You might - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on August 17, 2003 at 20:51:36:

want to hire a lawyer for the specific advice that you seek.

It has been my experience that “doodling” on the back of a check will not hold up in court, just a thought.

import · August 17, 2003, 8:47pm

Re: Investor Implies - Posted by John Merchant

Posted by John Merchant on August 17, 2003 at 20:47:22:

Only a lawyer reading your whole agreement could be in a position to tell you what you’ve committed to.

But this I can say: the only things you’re bound to perform, as per this agreement, are the items spelled out in same…no external oral agreements would have any relevance, certainly NO enforceability…only the items in the written, signed agreement.

import · August 18, 2003, 10:08am

Re: You might - Posted by Elizabeth

Posted by Elizabeth on August 18, 2003 at 10:08:59:

Thanks for your comment. I agree that doodling will not hold up, but as I said in response to John Merchant’s comments, I’m probably overly concerned with ethics at this point, being new to the RE market. I guess I want to be sure that I don’t offend an investor for fear he will run and tell every other investor out there that he thought he had a deal on the 2nd property.

I feel confident that I can offer the 2nd property to my other investor and will move forward with that plan.

Thanks again. I appreciate your response.

import · August 18, 2003, 10:04am

Re: Investor Implies - Posted by Elizabeth

Posted by Elizabeth on August 18, 2003 at 10:04:46:

Thanks for your comments. I’m a paralegal and was extremely careful in preparing the Assignment of Contract, leaving no room for anything to be misinterpreted. I’m sure that I have no legal obligations to this man, but I guess I’m more concerned about ethics or what he may perceive as lack of ethics on my part.

Now this morning he called me and asked if I would call the seller of the property I assigned to him, and ask him such and such a question as if I am his secretary. I politely reminded him that I am no longer involved in the property, and that I have given him all contact information for the seller (he met the seller himself) and that I’m quite busy and must run to Court today. He said something like Oh, I thought you would want to help.

My husband thinks that the man just believes I’m very naive and wants to keep using my services until I say enough, which I did this morning.

Thanks again for your advice.