Pros: Lost a couple deals Need advice on closing - Posted by Chris

Posted by Rich-CA on August 09, 2007 at 22:18:50:

And strong arming a seller through a specific performance suit is a good way to get the legislature interested in helping out the “victim”.

Pros: Lost a couple deals Need advice on closing - Posted by Chris

Posted by Chris on August 09, 2007 at 08:36:09:

Problem: I have recently had some foreclosure deals slip through my fingers.

Current System: After getting property under contract I give it to my attorney/title company who does title search. I get trust set up, etc. I close within about 3 weeks. It sometimes takes that long just to get a payoff # from the bank. (Last statement wont show attorneys fees since Foreclosure filing so need that official # from bank)

Problem: At the last minute I’ve had some folks back out. Today a big deal backed out saying her family decided to help. She’s staying in the house. Had a couple like these recently.

Question: Do you guys get the deed right away rather than waiting to do closing with attorney/title co.? What techniques do you guys employ to avoid this?

Thanks so much,


Lost a couple deals Need advice on closing - Posted by Natalie-VA

Posted by Natalie-VA on August 10, 2007 at 08:43:38:

I close these as fast as I can, usually within a couple of days. Locally, the payoff usually comes from the attorney’s office that’s handling the trustee sale. Sometimes getting a payoff is a problem, but we persist.

I would hesitate to let someone out of their contract unless they truly had a family member help them. Perhaps you can have them give you some sort of first right of refusal to avoid having them sell to another investor who might have offered a better deal.

I’ve only had one try and back out (after I reinstated his loan at the tune of 21k). I filed a specific performance lawsuit and he changed his tune quickly.


Are you guys getting deed? - Posted by Chris

Posted by Chris on August 10, 2007 at 07:46:21:

They were definately motivated. Heck, they were subject to deals. I think its just one of those things. Not going to sweat it after hearing feedback.

BTW: Are you guys getting the deed at the kitchen counter or are you doing traditional closings? I do traditional, but it takes the sellers bank some time to give the payoff and/or amount to cure numbers. Usually a couple of weeks! I’d love to close more quickly than my typical 3 weeks, but just dont see how without having all the final figures in…

Lost a couple deals Need advice on closing - Posted by Clark Kent

Posted by Clark Kent on August 09, 2007 at 16:56:14:

Obviously, regardless of what your contract says, you don’t want to be known as the guy who strongarms people into taking their homes.

However, since this is a recurring theme with your deals recently, then I have to ask… how motivated were these people from the git go?

Are you talking to the wrong prospects, or trying to convince people who aren’t that motivated in the first place?

I don’t have the patience to try to convince people (anymore), someone who’s truly motivated will be convincing the investor to buy.

I’ve only had 3 sellers want to back out of deals in my life, and none in this millenium.

Re: Pros: Lost a couple deals Need advice - Posted by Kristine-CA

Posted by Kristine-CA on August 09, 2007 at 12:51:51:

How are these sellers backing out of a contract? They are obligated to
perform. If they do not want to perform they need your agreement to
cancel the contract. Are you just saying OK when they call and say
they’ve changed their mind?

It is your decision to let them out of the contract, with or without

So what does your contract say? Kristine

Me too…??? - Posted by acw

Posted by acw on August 09, 2007 at 11:45:50:

I’m confused too…

Did you get them to sign a contract?

Did you place a deposit in escrow with your favorite title company?

Re: Pros: Need advice - Posted by Matthew

Posted by Matthew on August 09, 2007 at 10:55:37:

You are going to lose afew and that means a few good ones. Don’t get bent out of shape. these are people who are entitled to keep their homes or lose it in can’t convince everyone. I have used the following in my 12 years of dealing with distress owners.Good news travels slow,(you are able to help someone bail out and they refer you to a friend or family); Bad news travels fast(you took someone’s home and stole their equity, bad reputation) You will also be requested to appear downtown,another true saying is " what comes around goes around" heed this advice and you will do well in your business.

Re: Pros: Lost a couple deals - Posted by StevenS(CPA)

Posted by StevenS(CPA) on August 09, 2007 at 09:12:25:

I’m a bit confused on what you’re saying is this a REO or is this through the seller?

Do you have the property under contract or are you just talking to the people?

ALWAYS put the property under contract with a few weasle clauses just in case it’s not a good deal for you, but always put it under contract before doing anything.

If you are havng trouble with people backing out after the contract is signed you need to better worded contract to get damages if you spend any money investigating the property once the contract is signed.

I hope we’re talking about the same thing, but that’s what I would do.

Hope this helps

Re: Lost a couple deals Need advice on closing - Posted by Rich-CA

Posted by Rich-CA on August 09, 2007 at 22:17:19:

I would add that the “strong arming” has resulted in legislative interference in this area of REI.

Re: Pros: Lost a couple deals Need advice - Posted by Chris

Posted by Chris on August 09, 2007 at 13:18:31:

I could sue for specific performance, but if they can stay in the house then it just seems right to let them out. I do make them pay me back for any costs before I do so.

Re: Me too…??? - Posted by Chris

Posted by Chris on August 09, 2007 at 12:43:59:

These are pre-foreclosure deals and I have done many successfully, however I’m losing a few lately and its just making me look at my system.

Yes, I get them under contract and have escrow with title company. Between contract signing and closing some have fallen apart. They find a “family member” or some such to bail them out, or other excuses. Just curious how other people are avoiding this. How long are you waiting to close? Getting it done faster than in 3 weeks? I don’t usually try to take the deed in their living room, but do it at an official closing with an attorney. You guys doing the same?

In the end it may be like the last gentlemen said, just gonna lose some. But I wanted to make sure there isnt something in my system that I could tweak to lose a few less per year than what I did this year.


Re: Pros: Lost a couple deals Need advice - Posted by Kristine-CA

Posted by Kristine-CA on August 09, 2007 at 13:58:46:

I agree that it sometimes make sense and seems right to let a seller
back out. I’m still curious about the contract they signed, though.
Some contracts are clearer and seem more forceful than others.

I’m not sure getting a deed upfront would help you much. IMO, the
same people that change their mind after signing a contract are the
same ones who would want to reverse deed. With pre-foreclosures you
get a lot people in distress making not very clear decisions. A lawsuit
is a lawsuit no matter how stupid or inane the claim. Lawsuits with
pre-foreclosures sellers are to be avoided, to be sure.

So you lose a few. But I would look at your contract closely to make
sure it’s crystal clear about seller performance. Kristine