Should I sue for performance? - Posted by Mark-GA
Posted by Mark-GA on April 18, 2000 at 08:42:11:
Here is the ad:
“Spotless 3BR cedar cottage grt for small family or investment. xxxx Ave near xxx. Fplc, pkg for 8, all new features 18ft master now only $65,000. Little or nothing down. Owner: xxx”
I know the area very well. A ?good? 3/1 is worth $100k, but I figure this has to be a dump. I hustle over there anyway and am not disappointed.
Come to find out this used to be a true ?caddy shack? for a golf course that used to be there. Even though it is not worth $100k, it is a good buy-and-hold if I can get it ?little or nothing down.? It actually doesn?t need that much work to be a good section 8 rental.
I call the owner and talk to him about the no money down thing. I don?t really understand what he is talking about, but he is willing to take back a second for some amount.
I tell him about a lender I have who will do no-seasoning refinances for me. If he finances me for 60 days, he can get all his cash out without taking back a second. He has owned it free and clear for 20 years, so 60 more days shouldn?t be a problem.
I fax him over an offer and he accepts.
I put down $500 earnest money. The price is $63k. He finances for 60 days with $1k down. In 60 days I obtain financing and give him all his cash.
I have my lender lined up and I am sure, with a little touch up work (5k worth), I can get a $85-90K appraisal and cash out at $68 ? 75K, depending on what loan-to-value I go with. I also have 60 days to find another buyer or lease-option it.
Since the house is not typical in its construction (putting in nicely), I pay $350 to have it inspected. I also run title, which costs me about $150.
We schedule the closing for this week. Three weeks pass (I go on vacation). In talking to him a few days ago, I realize he has no idea what he has signed. He is expecting all his money at closing, and he won?t budge. In fact, he has another closing lined up using the money from this deal. Whoops!
I offer to put down more money. No. I offer to make the note balloon in 30 days instead of 60. No. I offer to cash him out if he takes back a 20% second. No. ?This would mean you are putting nothing down,? he says.
At that point, I wanted to reach through the phone and strangle him.
Should I sue for performance?
Since he owns it free and clear, he can afford all my legal costs. Based on what I?ve seen, this guy would probably be better off selling the house to me. No telling what type of deal he will get himself into with the next guy.