Kind of a mess…could I get a little advice? - Posted by Carmine
Posted by Carmine on October 07, 2003 at 13:27:32:
I wanted to get some quick advice on a situation we have.
Here is some background:
A few months back, we had a motivated guy who wanted to be out of his house quickly, and so we got an option on his property and began to advertise to sell it. We got the option at his current loan value…$89k, and we were going to sell it at FMV which is around $120-125k. We secured the option with a deed of trust, which we recorded that day.
Well we found a potential buyer, and so we called the original owner to tell him we were going to exercise our option, and he told us he sold the house to someone else, who already recorded a deed. So we called up this new guy and he told us what we did is illegal and not binding in court, and he was going to set the DA on us. Then he sold the house for something like 20k to some brand new investor who didn’t have any clue what he was doing, and didn’t do a title search. This new investor completely fixed up the house (nice!), and right now he’s trying to sell it on a wrap.
Well we were going to wait until one of these guys was going to try to sell the house, and then tell him we would release the cloud on the title for a fee and just be done with it…but now we’re kind of re-considering because there is some equity left on the table.
Anyways, so I thought the process for us was to foreclose on the DOT and take the house back and then sell it, but I spoke with an attorney today who said that what we might do is talk to a title company and open escrow and let everyone know we are exercising our option…and the current owner will probably try to contest it and we’ll end up in court, where hopefully the judge will say we are in the right.
So I guess my questions are…does this sound right to anyone? Can we just exercise the option, since we have a DOT recorded first? Or would the option have to be recorded instead of a DOT? Would we end up sueing the original homeowner for specific performance somehow?
I realize this is kind of a mess, and we should have just gotten the deed in the first place. Live and learn…
Thank you very much for your time. =)