HELP! Why would a buyer put a house under contract to then only ghost?

6 Reply

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

2y

Did title get any of their LLC documents. Either way I would be looking up the principals and start contacting them. You could be dealing with them now or you could be dealing with low level employee. Contact everyone on their officer list. Do they have a real office, if so go there.

This could very well be one of the 70% of wholesale deals that make it to title, but never close. If it is someone with no money and they can't flip the contract they very well could bail on you.

OP

Real Estate Broker · Miami-Denver-Austin · Member since 2015 · 91 posts · 32 votes

2y

@Russell Brazil thank you! Makes sense.

$5k was Earnest. What is strange is I found a review of another entity of theirs where someone said they just kept ghosting and then eventually places some sort of strange lien on the property. Which seems strange why they would tie up money but nowadays the scams are pretty creative.

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Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

2y

Quote from @Dakota Mivshek:

@Russell Brazil thank you! Makes sense.

$5k was Earnest. What is strange is I found a review of another entity of theirs where someone said they just kept ghosting and then eventually places some sort of strange lien on the property. Which seems strange why they would tie up money but nowadays the scams are pretty creative.

Surprised the EMD would be that much.

That's interesting if they do try to place a lien on properties.

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Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

2y

Was the "lowball" offer high enough that you could find another buyer? I might change the MLS listing to the lowball offer price and put now accepting backup offers. You might have a flood of offers. Or you might find out the lowball wasn't low enough.

I assume you have no interest in buying at the accepted price? Any friends/relatives that want to get in? Maybe post it on BP?

good luck and let us know what happens.

3 Reply

OP

Real Estate Broker · Miami-Denver-Austin · Member since 2015 · 91 posts · 32 votes

2y

@Account Closed makes sense. Appreciate the thoughtful response.

@Bill B. likewise, thanks for following this post and adding your thoughts. The lowball offer wasn't so crazy (listed at $670k, accepted offer was $620k). Low, but not absurd.

I rec'd a response finally today, but it was "what do you mean, we are still progressing." Surely will keep you all posted! Regardless not a fun party to work with!

4 Reply

Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

2y

Cool. Let us know if they come to closing table and you just got spooked.

Tom GimerBusiness Member

DMV · Member since 2017 · 3k+ posts · 3k+ votes

2y

They will likely terminate before the inspection period expires. If they don’t, my guess is they already have a buyer on the line.

The solution going forward is don’t agree to terms with wholesalers that have study periods unless the DD period is reasonable and/or you can still market until the $ goes hard.

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2 Reply

Luis Maqueira

Rental Property Investor · Miami · Member since 2022 · 247 posts · 75 votes

2y

No damage done yet but like relators, there are good wholesalers and Just wholesalers.

You need to do the duediligence to make sure you are working with the right ones.

We are a group and one division do wholesaling, we buy from them all the time and Multifamily buildings too. We have a Real Estate company and we accept assigned contracts from them ... they have a data base more active than clicks on Zillow.... They sell faster.

They are wholesalers. No buyer to assign the contract to they will cancel.

How much was the EMD?

Luis M

Jack V. Ospina

Real Estate Broker · Miami, FL · Member since 2018 · 236 posts · 99 votes

2y

@Dakota Mivshek I've had a similar experience with them a few years ago when I was selling a large parcel of land in South Miami. They disappeared and when we tried to go after the EDM the title company was clueless on what to do. My attorney also tried sending letters to the attorney on file for the title company. It would cost more to hire my attorney and go after the EDM so basically left it as is. At this point I believe the title company they use works with them on these deals. What a shame

OP

Real Estate Broker · Miami-Denver-Austin · Member since 2015 · 91 posts · 32 votes

2y

@Jack V. Ospina

Gosh. Thanks for the heads up. I just can’t understand their angle for tieing something up.

My seller would be fine just releasing the earnest money but without any consent to cancel the contract from buyer I’m not even sure where to go from here.

John K.

Lender · West Palm Beach, FL · Member since 2017 · 306 posts · 122 votes

2y

Hi Dakota,

This sounds like a wholesaler who is looking to reassign the contract to another buyer for a fee. In the Florida FarBar contract (the only contract I would use--don't accept a different generic format as there are many protections missing) there is a part where the contract states whether it can be assigned or not. I always check to make sure that the "contract may not be reassigned" box is checked.

John

2 Reply

Jack V. Ospina

Real Estate Broker · Miami, FL · Member since 2018 · 236 posts · 99 votes

2y

@Dakota Mivshek From my recollection I think mostly I was dealing with the secretary of the company or some assistant and these people are all unlicensed, unprofessional, basically don't have any concept of how to structure contracts or even withdraw from a contract unfortunately.

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

2y

Quote from @Bill B.:

Was the “lowball” offer high enough that you could find another buyer? I might change the

Great idea.....awesome idea.

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

2y

Quote from @Jack V. Ospina:

@Dakota Mivshek I've had a similar experience with them a few years ago when I was selling a

Our title companies now send a letter that does not need to be signed, that basically states if they have not heard from the buyer in 14 days, the EMD will be released to the requesting party. I haven't seen any, but understand some attorney's now are threatening pretty nice suits for falsely filed memos clouding title. I think one of the big well know brands had their CEO retire in the last year or so over "memorandum" filings his franchisees were filing.

OP

Real Estate Broker · Miami-Denver-Austin · Member since 2015 · 91 posts · 32 votes

2y

If and when the closing date specified if 4/1/24 comes and goes and the buyer doesn’t pay or show up, is the contract then null and void?

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

2y

Quote from @Dakota Mivshek:

If and when the closing date specified if 4/1/24 comes and goes and the buyer doesn’t pay or show up, is the contract then null and void?

Not in our market in Texas. Check with your broker and title company. Typically here we would need to send a demand letter to close.

OP

Real Estate Broker · Miami-Denver-Austin · Member since 2015 · 91 posts · 32 votes

2y

Well I just want to thank you all. Quite the saga, but the buyer finally signed a cancel and release form.

I ended up hunting down someone to which the buyer had done this to before. The story was crazy. The buyer would ghost then file a affidavit of interest in the property and when the seller tried to sell the home at a later date with a clouded title, the scam artist would ask for $10-$20k to clear the title. Essentially a form of extortion in my eyes.

Through a lot of documentation, I also called out the title company for never providing me a earnest money receipted check or wire transfer - I simply got a letterhead saying the money had been deposited. Which leads me to believe title was in on it too. Maybe...

More to the story, but quite the lesson learned. Thanks again all!

And if you ever come across a John Aaron in Florida, avoid him at all costs.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Bruce Lynn:

Quote from @Jack V. Ospina:

@Dakota Mivshek I've had a similar experience with them a few years ago when I was selling a

Our title companies now send a letter that does not need to be signed, that basically states if they have not heard from the buyer in 14 days, the EMD will be released to the requesting party. I haven't seen any, but understand some attorney's now are threatening pretty nice suits for falsely filed memos clouding title. I think one of the big well know brands had their CEO retire in the last year or so over "memorandum" filings his franchisees were filing.

I suspect that was We buy ugly houses they got hammered.. yes clouding title opens them up for a slander of title suit..

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2 Reply

Preston DeanBusiness Member

Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes

2y

Quote from @Dakota Mivshek:

Hi all. Currently in a situation that I can't make heads or tails of. Would love any advice.

So, essentially I had a listing here in Miami that was quite stale and on the market for a while. This strange company called Real Estate Express Acquisitions LLC kept emailing low ball offers that we presented but generally moved on quickly from. After some time, my seller needed anything they could get so we accepted a low offer from this group. Upon acceptance they casually slipped in that they needed me to transaction broker both sides, seller obliged.

Now we are 48 hours away from the inspection period ending and I can't get a hold of anyone. Title has confirmed that they are in receipt of the Earnest Money but despite all my efforts, I cannot get a hold of anyone on the buyer side. After some research I've found some concerning reviews for the 'group' behind this company - the Aaron Organization.

My questions are:

1. What is their angle here?

2. I've sent the cancellation and release paperwork to sign to no avail.

3. How can we get out of this transaction and what do we need to be careful of? This is surely a scam but I can't figure out the angle.

@Dakota Mivshek

Sounds to me like a classic case of wholesaler. They are ghosting you because they are not the end buyer and they are doing their best to flip the contract to someone else during that option period.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

2y

Quote from @Dakota Mivshek:

Well I just want to thank you all. Quite the saga, but the buyer finally signed a cancel and release form.

I ended up hunting down someone to which the buyer had done this to before. The story was crazy. The buyer would ghost then file a affidavit of interest in the property and when the seller tried to sell the home at a later date with a clouded title, the scam artist would ask for $10-$20k to clear the title. Essentially a form of extortion in my eyes.

Through a lot of documentation, I also called out the title company for never providing me a earnest money receipted check or wire transfer - I simply got a letterhead saying the money had been deposited. Which leads me to believe title was in on it too. Maybe...

More to the story, but quite the lesson learned. Thanks again all!

And if you ever come across a John Aaron in Florida, avoid him at all costs.

you would do the public good to file a complaint with the DRE in your state and send the fact pattern to Insurance commissioner filing a complaint against the tile company .. and send to the local DA and AG.. this is a horrific scam to cloud titles its a premeditated scheme of fraud and deception harming the general public.. just a stain on the industry.

but now that you know its up to Agents to be much more aggressive vetting I buyers or any buyers that are not mom and pop.. This is why your clients are hiring you.. I bet you will never let this happen again..

My wife gets these calls and will say to me you ever hear of this and I tell her point blank wholesaler do not let your clients transact with them. She is pretty savvy and experienced But this current way of doing things is new to many agents.. I believe Brokers need to be having meetings with their agents and discuss these things at length Managing Brokers job to make sure their agents are being managed.

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3 Reply

Preston DeanBusiness Member

Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes

2y

Quote from @Dakota Mivshek:

Well I just want to thank you all. Quite the saga, but the buyer finally signed a cancel and release form.

I ended up hunting down someone to which the buyer had done this to before. The story was crazy. The buyer would ghost then file a affidavit of interest in the property and when the seller tried to sell the home at a later date with a clouded title, the scam artist would ask for $10-$20k to clear the title. Essentially a form of extortion in my eyes.

Through a lot of documentation, I also called out the title company for never providing me a earnest money receipted check or wire transfer - I simply got a letterhead saying the money had been deposited. Which leads me to believe title was in on it too. Maybe...

More to the story, but quite the lesson learned. Thanks again all!

And if you ever come across a John Aaron in Florida, avoid him at all costs.

@Dakota Mivshek

Just seeing your reply. Happy to hear it was cleared up! But infuriating that people are out there doing this type of stuff

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Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

2y

That was it. 100% and I think they told the franchisees to quit doing that. In one of our local forums with a lot of wholesalers, they are quit to tell each other when things start to go south to file memos, and there are a couple of attorneys in the group who are quick to jump in and threaten lawsuits if they do. What I see occasionally is newby wholesaler does this and then disappears. Then it is a real pain to hunt them down to get the release.

OP

Real Estate Broker · Miami-Denver-Austin · Member since 2015 · 91 posts · 32 votes

2y

@Jay Hinrichs one heck of a learning experience for sure. And I will absolutely be filing a complaint and pushing this up the chain.

@Jack V. Ospina , @John K., @Bruce Lynn, @Preston Dean thank you!

Robert B.

Orlando FL/Allentown, PA · Member since 2023 · 36 posts · 24 votes

2y

As a newbie, can you elaborate on what this memo is and what it may state?