Unethical Investors... - Posted by Mike

Posted by IB (NJ) on July 16, 2003 at 15:50:32:

Is the Realtor the listing agent? If so, the seller is obligated to deal with her. If the Realtor is only representing you as the buyer, you may have a problem on your hands if your state allows a 3 day attorney review.

Unethical Investors… - Posted by Mike

Posted by Mike on July 16, 2003 at 07:00:57:

I live in the NY area where investing is extremely competitive. It is not uncommon to over pay for a home and still make money! I mentioned to an investor friend, or who I thought was a friend, that I was going to purchase a piece of property at a great price. He told me that he may approach the owner, offer them more money and buy the house from under me! I proceeded to say that the moment I go into contract (which will likely be within a day or so) I would record the contract at the county clerk. After he was done laughing, he said that will do nothing. I told him it would cloud the title, and he said big deal. If I am an all cash buyer, with no bank involved I can still buy the house without clear title. The house will be mine and you will have to try to get it back.

Does anyone know what to do if this actually happens? Is it true that an all cash buyer may still buy a house with a clouded title. Since there are no banks involved to be concerned about title insurance, does this mean I will face years of litigation?

Thanks for any help.

Re: Unethical Investors… - Posted by Sean

Posted by Sean on July 16, 2003 at 13:31:01:

If a seller signs a purchase and sale agreement with you and then sells to someone else, you sue for specific performance… believe me, if you have a good attorney, you’ll get paid or get a judgement against them.

If you find a buyer who buys out from under you, knowing full well you have a purchase agreement with the seller, they too have engaged in I believe is called tortious interference of a contract and you can sue them and win as well.

Finally as mentioned before if you have cloud on title, even if he buys the property all cash, he can’t sell it to anyone effectively, without paying you.

Sounds to me, like its time to get a nice attorney, let the guy buy it, sue the seller, sue the buyer, get your judgements, then turn them over to a good collection company to get your money.

Just my thoughts.

Remember, It also takes an unethical seller - Posted by gerald(tx)

Posted by gerald(tx) on July 16, 2003 at 11:52:31:

to agree to sell out from under you when you already have an agreement. If he winds up having to pay his way out to uncloud the title, serves him right.

The two crooks deserve each other.

Meanwhile, many attorneys will gladly take these cases, if the original contract was strong, because it’s usually cut and dried to the judge.

Re: Unethical Investors… - Posted by Kristine-CA

Posted by Kristine-CA on July 16, 2003 at 09:55:36:

Mike: where I work in CA the prices are much, much lower and buy-and-hold investors buy property with title clouds all day long. Many deals are done with cash without banks or lenders and all kinds of title flaws show up that aren’t worth fixing. Old trust deeds that were not re-conveyed, all kinds of crazy quit claims, and other recorded docs such as the purchase contract you mention. If one is only intending to benefit from the cash-flow, all one has to do is analyze the risk of of any of those title issues coming up during ownership.

Now, of course, re-selling is a whole other matter. Who do you sell to you with an imperfect title? Cash buyers who don’t understand title very well. And there are plenty of those here as well.

Where property values are higher, such as where you are, there is more litigation and settlement over such issues. But yes, there are people who buy with title clouds and willing take on risk.

Sincerely, Kristine

What about attorney review… - Posted by Ben (NJ)

Posted by Ben (NJ) on July 16, 2003 at 09:53:11:

some states have at least a three day attorney review period where your contract can be killed for any reason. Therefore, the seller can take the higher offer and just terminate your contract. Seminar lesson one- if you must brag at least wait until the deal is locked up!

Re: Unethical Investors… - Posted by Tom (MI)

Posted by Tom (MI) on July 16, 2003 at 08:57:58:

How is he going to sell the property with a cloud on the title? He will have to look very hard to get an all cash offer and make a profit when he sells.


Re: Unethical Investors… - Posted by Frank Chin

Posted by Frank Chin on July 16, 2003 at 08:10:06:

Hi Mike:

Most NY RE transactions involve attornies on both sides, and I assume you have one representing you on the P&S agreement, and also recording of the contract. I’m from NYC.

I was involved in a preforclosure purchase once, and the seller was showing the property to others after signing the P&S contract with me. Long story. I advised the seller that the contract was recorded - and he said “Soooo”

So my attorney advised his attorney that we intend to file a lawsuit and have the judge issue an injunction against the seller proceeding with any other buyer.

Furthermore, if he closes with a cash buyer, then we’ll sue him and the buyer for damages.

According to my attorney, when the seller’s attorney spoke with his client, the seller asked “can they do this??” His attoreny said “Oh yes, they can and intend to drag this thing out”.

He closed with me.

Frank Chin

Re: Unethical Investors… - Posted by Mike

Posted by Mike on July 16, 2003 at 14:51:36:

I will see how far this guy is going to take this. I am working with a very ethical Realtor and this investor would have to step over her shoes to get it and that ain’t happening!

I’ll keep you posted.

Thanks for all of the feedback!