Posted by DoubleJ on September 20, 2005 at 22:48:32:
First and foremost, please let me apologize if I dont communiate the situation well enough.
But I will attempt to describe the situation in as great of detail as possible, and try not to be to lengthy.
My partner and I started a Florida S Corp recently and decided to hunt some pre-foreclosures.
One night I called a lady fresh off of the list and set an appointment for my partner (in another metro area) to go over and take a look and possible make an offer. I asked the seller that night " You havent signed anything with anyone have you? " to which she answered no.
My partner went there and offered $220k on the property, with $500 down and was told that she would have to call another guy that was interested before making a decision.
2-3 days later we get a call from the investor who says he already has the seller under contract. I later find out that he was there the night that I called and made the appointment.
He said he would be happy to assign the contract for the difference between the $220k, and his $206 contract.
We struggled to find a lender who would allow such an assignment, and found one that would allow him to recieve $5000.
I called him back and negotiated $1000 up front, with $4000 paid at the closing. He faxed over an assignment doc, and we got the approval from the lender. All was well.
Fast forward a few days later. The seller calls us very upset saying the payoff on her house came in at $204! Up until then the investor had said he thought the payoffs were around $190.
Now we are waiting to see if the title company gives us a total payoff at the closing under the contract price.
The seller has indicated she has no intention on closing unless she can recieve enough money to move out of the deal, and there is enough equity in the home to say that she could do a lot better than that.
So we have contacted her lender to attempt to negotiate the payoff some, as we anticipate the total payoff figure from the title company.
As we wait, I wonder what will happen if the short falls through and the lender wont cooperate. Its not unlikely that a short will be denied because of the equity left in the deal. The house will probably sell for around $290 when we are done with it.
I wonder if the investor can hold us to the terms in the assignment agreement if the payoffs are more than the amount due to the seller?
If the seller will not perform on the contract, then the deal is dead right?
Then by that logic, cant we sign a new contract with her, or is that crossing the line?
What happens to the seller if they are required to bring money to a closing in order to sell their home?
I need a real estate attorney, eh ?