BiggerPockets

I've been dealing with this seller for about a month now and he doesn't like the closing attorney that we are working with. I'll agree that the attorny has been making the seller jump through hoops but I'm trying to get this deal done. To make a long story short, I still have a valid contract but my seller told me that he will now sell the property to another investor.

My question is, how do I prevent this from happening? I know that I can record the contract and cloud the title but how do I go about this in Washington D.C?

The seller has poa for his mother who is the owner of the property. There was a lot of research that has went along with this deal that's why it took so long. It wIll take just as long with another settlement company. Plus there is a double assignment on this contract, that's another issue that would have to be dealt with if we switch title companies.

Totally agree with Andrew. As a wholesaler and rehabber for 11 years, I can tell you that the LAST thing you want to do is push your seller into a corner. They can soil your name on and offline, get the state bulldog (Atty. General) on you and/or a whole host of issues you simply don't want over one deal.

The attorney should have been handled differently EARLY on in the deal if you ask me. It soulds like the attorney has been communicating directly with the seller. If so, that may have been mistake #1. First I always get a consumer-friendly (as opposed to investor-friendly) attorney for my sellers (and buyers, if need be). Someone whose personable and patient.

Second, if the attorney has a lot of requests for my seller, I FIRST see what is it that I can actually do and avoid bothering the seller with. I then take the ones the seller must do on their own and bring them to the seller myself. Every wholesaler should have a well established rapport with their seller. So that when they come to the seller with pain in the butt stuff to do, it comes across better than it would from an impatient attorney or his rushed assistant.

Third, that established rapport also helps you to avoid your deal being circumvented by another investor. Most of my (buy) deals take anywhere from 5-16 months to process and close. During the process I end up needing a lot from sellers. But in the end they are grateful I was patient enough to work with their problem real estate (their words and viewpoint, not mind) and are amazed I will willing to do so much work to get it done. And I get a great deal I couldn't have dreamed of getting on the mls.

So Mike, try going back and reviewing your relationship with the seller and how you handled this deal. The key, imo, is to avoid aggravating the seller. Pay them a fee for working with you (especially in the case of someone with a POA and whose not getting paid). Help them out with other non-real estate related problems they may be having. Something. But taking the legal route and clouding title is usually NOT the answer. Good luck.

Fax a copy to a court runner and pay them to record it.

Find them under legal services.

File a "notice of contract" with the county/city recorder of deeds. Once you do this, it will protect your interest in the property.

After you have done this, then explain to the seller what you have done and try to work out from there.

Don't wave it in his face, but explain that you file "a notice of contract" on all of your purchase to protect your interest in the deals that you put so much time and effort into. Usually the seller will come around.

Hi Mike,

You should listen to Ophelia and Andrew. Let the seller know that you will be there for them if they need you again. Let them know they may face the same situation with the new investor and that you are closer than anyone to closing the deal. Be as compassionate as possible, and do not cause them extra stress. Chances are they will realize you have their best interest at heart and stick with you.

Best Wishes

Rodney

The issue isn't whether you're right or wrong it is about the highest and best use of your time and energy. I have a clause in my agreement which calls for the seller to pay $50,000 in damages if they fail to honor the agreement to purchase.

And it also calls for the recording of a memorandum of contract. However at the end of the day these tools are really there for the seller who may be on the fence on canceling without cause.

Those who want to cancel I tend to dump into the 80/20 rule and go buy another house.

The reality is that if we do enough prospecting the fallouts don't hurt.

I recently ran across a similar situation here in Atlanta. The seller's family got involved and....well long story short -- the seller did not want to sell it.

After speaking with a couple of attorneys and getting advice about any cases with precedence we quickly realized that a Lis Pendens could not be filed without a lawsuit first being filed. Now, we're starting to talk about time and money.

What was also told to me was the chances of suing for "specific performance" would be hard to do and could take some time. The laws, here in Georgia anyway, did not make it easy to do. The alternative was to get a monetary judgement filed against the seller. Sure, you could do that...it would cost some money. But, in the end are you really going to get anything out of the seller? Probably not.

The bottom line is if a seller doesn't want to sell the house it's probably not worth the time or energy to fight it. There are plenty of deals out there so we chose to move on.

That's just my opinion, but that's what happened. Hopefully this helps out a bit.

Thanks,
Manesh

I remember this deal when you first started talking about it. It was trouble when you first started and I remember someone saying if the deal starts out crappy its probably an indication of how the deal will turn out.

Anyway, I'm with Dan K. I never had to do it but I was taught if a seller renegs...file your contract with the county clerks office.

I would talk to an RE attorney just to confirm if its a good tatic but you acted on good faith...so should the seler.

The seller stating they are backing out and going to sell to another investor is nothing more than an object and you need to learn how to handle this objection.

If the seller threatens to sell because of the hurdles, you need to get on the phone and deal with the seller. Be patient, sympathetic, and understanding. You need to explain that no matter who he sells to, he would have had to go through these same steps because of the POA. Reassure him that you are so close to the finish line it would be a huge disappointment if he backed out now. Also tell him that if he cancels the contract with you and sells to another investor, he will have to do all the same stuff all over again and then ask him if that is what he wants to do.

I will offer to get in between the attorney and the seller and let the seller know he doesn't have to deal with the attorney any longer if he doesn't like to and that he can deal only with me or maybe the attorney's secretary. This is an easy objection to handle and threatening court action is not how it is going to get done.