Posted by Bud Branstetter on February 23, 1999 at 11:20:37:
File the mechanics lien and the response would probably be a slander of title suit. The mechanics lien here requires certain paperwork signed by the owner and the sales contract is not one of them. If you want to play file a suit for specific performance.
OWNER REFUSES TO SELL PROPERTY - Posted by Jim Davis
Posted by Jim Davis on February 22, 1999 at 13:36:58:
I had put a post out about a property i had under concract where the buyers refused to buy the property because they said the % rate was to high and i kept there despoit because it says clearly in the paperwork that if the buyers back out the despoit is nonrefundable.
Now the owner of the property says that he does not like the way i do business because i refused to give the buyer’s money back (buyer got the owner’s # from the title company where he refused to sign the paperwork) and that he will not sell me the house now.
I basiclly need to know what my options are as far as dealing with the seller.
Jim
Re: OWNER REFUSES TO SELL PROPERTY - Posted by Bud Branstetter
Posted by Bud Branstetter on February 23, 1999 at 13:15:16:
The remedy for the seller not wanting to close is a suit for specific performance. The problem I see is
that you may be trying to do a simultaneous close without having the resources to actually do the
deal yourself. If the deal is good then my position would be to close it and make your money on the
next guy. You could negotiate with the buyer and the seller to solve the problem. While I do not
advocate the costs in money, time nor energy to file for specific performance you have to make that
decision. Don’t have an attorney send a letter threatening to do so unless you are prepared to follow
through. If there was not the profit to pay for the attorney fees then spend your time and energy to find the next deal.
Geez…that sounds a little familiar… - Posted by ScottE
Posted by ScottE on February 23, 1999 at 07:59:35:
Jim,
Please see my post below. A variation of my deja vu.
Re: OWNER REFUSES TO SELL PROPERTY - Posted by Rob FL
Posted by Rob FL on February 22, 1999 at 22:38:20:
I agree, cloud his title by recording a memorandum of contract if your contract allows it. Then do what Sean suggested ask for your money back plus interest for your trouble, and also only give back your buyer part of his money. Keep some of that for his trouble. I have had buyers back out on me before. I always try to take actual costs plus about 10% for my trouble.
If the seller and buyer go for your deal, then record a release of the memorandum of contract.
If they tell you to drop dead, then just sit back and wait for the title company to call you asking you to record the release. Just tell them, I will be glad to release it for $5000 or whatever your contract says are damages.
Good advice below - Cloud his title. - Posted by Andrew Smith (Phila)
Posted by Andrew Smith (Phila) on February 22, 1999 at 19:48:14:
Where the heck does your seller get off judging you in a matter that really doesn’t concern him. Also, where the heck do you buyers get off contacting the seller directly. Tell them both to pound sand and cloud his title unless he is willing to compensate you as much as your anticipated profit from the deal you put together.
Joe Kaiser said it - Posted by Sean
Posted by Sean on February 22, 1999 at 18:21:01:
Your buyer has talked to the legal title owner? I agree with Joe, it sounds like they want to play cut-out-the-middle-man-and-split-the-savings.
Personally I’m a nice guy. I’d tell the owner if he doesn’t want to sell, he doesn’t have to but that all the money I paid to him and in costs will need to be refunded to me by him, plus 18% interest or $1,000 whichever is more.
But don’t let the guy think for even a minute that you don’t have his balls to the wall. If you have a contract with consideration the seller has no choice but to sell if you want to buy EVEN IF NOT ONE SINGLE DOLLAR HAS CHANGED HANDS. If you haven’t already done so check out http://www.creonline.com/art-111.htm for a nice article on California (yay) contract law.
I suggest negotiate first but be prepared to sue if you don’t like where negotiations get you.
Re: OWNER REFUSES TO SELL PROPERTY - Posted by Joe Kaiser
Posted by Joe Kaiser on February 22, 1999 at 15:35:45:
My red flag indicator suggests your buyer and seller have it already worked out where the deal goes through . . . but not through you.
Whenever they come up with the bogus “character” issues you can bet it’s their way of rationalizing away their obligation to perform. They figure if you’re the “bad guy,” then they have no obligation to deal with you.
I’ve been in your position and could drive you by the house where the homeowner sold to my buyer . . . $11k not in my pocket. Dooooh.
Lesson learned.
Joe
Re: OWNER REFUSES TO SELL PROPERTY - Posted by Chris Spohr
Posted by Chris Spohr on February 22, 1999 at 15:16:41:
Jim,
It’s business pure and simple.
I suggest that you have a conversation with the seller to explain that you need to get compensated for your efforts. It’s not your fault the buyer changed their mind. You gave them terms and they accepted.
If this is a Lease/Option deal, then you should have a Memorandum of Option filed with the County Recorder to protect your position. This clouds the title and the seller can’t sell without taking care of you - for the amount that you decide your efforts are worth.
I’m not saying to gouge them - be fair, but also don’t get screwed. The buyer and/or the seller may just be trying to cut you out of the picture.
Good luck,
Chris
Re: Think long term - Posted by Stacy (AZ)
Posted by Stacy (AZ) on February 22, 1999 at 14:11:09:
Jim, would it be of greater benefit to you and the others involved to give them back some of their deposit? I’m not sure, but this sounds like a lease option, and you are speaking ot the option consideration. Or is this earnest money on a sales contract?
You could explain exactly why the deposit is not refundable, and then agree to give them some of it back for the sake of “good will”. It seems your goal should be to compromise a little to get back in good standing with the seller, as hard as that pill may be to swallow. Your long-range goal of getting the property sold is being held hostage by this misunderstanding. Choose your battles.
Then again, if this seller is going to prove to be difficult from here out, maybe it’s best to get out and move-on.
Stacy
Re: OWNER REFUSES TO SELL PROPERTY - Posted by Joe Kaiser
Posted by Joe Kaiser on February 23, 1999 at 07:06:27:
Recording your contract or a memorandum thereof is no guarantee they can’t get the deal done anyway.
I had a situation a few years back where the simply closed around my recorded agreement, so don’t think it’s an absolute answer to the problem.
Joe
Re: OWNER REFUSES TO SELL PROPERTY - Posted by Rob FL
Posted by Rob FL on February 23, 1999 at 18:17:18:
I agree it is not the end all. Obviously, the easiest thing to do is try and get your deposit money back and maybe a little extra and then walk away.
If you really wanted to be a tough guy you could always record a lis pendens and file a specific performance lawsuit. That would almost definitely kill their closing. Of course that would probably be a losing proposition on a $5000 or so flip.
Re: OWNER REFUSES TO SELL PROPERTY. What about a lien? - Posted by Michael Murray
Posted by Michael Murray on February 23, 1999 at 10:39:05:
Say, Joe, Just wondering out loud. If work has been done by someone trying to flip a contract, rather than filing a memorandum wouldn’t it be legal to file a mechanic’s lien? I don’t think anyone could tapdance around that and would need to have it removed before they could close.
I figure you, being the acknowledged expert, would know the answer. If anyone else here has experience or knowledge, please speak up.
Thanks,
Michael