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

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

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

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.

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Russell BrazilBusiness Member

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

2y

They are clearly wholesalers. It sounds like they were unable to find an end buyer to assign the contract to.

How much was the EMD? I suspect small.

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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
2y
Quote from @Robert B.:

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

As a newbie I would tell you don't ever file a memo and forget they exist. Be up front and honest and have integrity. Make great offers that are win-win for everyone you and the seller. Close your deals. If you can't close them, don't make them. That keeps everyone out of trouble.
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Robert B.
Orlando FL/Allentown, PA · Member since 2023 · 36 posts · 24 votes
2y
Quote from @Bruce Lynn:

Quote from @Robert B.:

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

As a newbie I would tell you don't ever file a memo and forget they exist. Be up front and honest and have integrity. Make great offers that are win-win for everyone you and the seller. Close your deals. If you can't close them, don't make them. That keeps everyone out of trouble.
I was trying to understand exactly what a “memo“ is. I understand a mortgage is recorded, or A lien would be recorded.. but what exactly is the memo in the situation and how/why would it be filed??
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
2y
@Robert B. A memorandum of interest (or affidavit of interest, memorandum of contract) is a document or instrument that summarizes the contract or seller’s breach/anticipatory breach of contract and which is recorded among the local land records. It is intended to give the world notice of the buyer’s claim and cloud the title. It’s used to prevent the seller from conveying to some other party or to force the seller to come to settlement. Also to document and support a future suit for specific performance.
Is everybody who uses this tactic a scumbag? No. Sometimes it’s the seller who is the scumbag.
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Robert B.
Orlando FL/Allentown, PA · Member since 2023 · 36 posts · 24 votes
2y
Thanks for explaining this….had not heard of this before. Much appreciated.
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Herschw Alex
Member since 2024 · 1 post · 0 votes
2y
It's possible that the buyer, Real Estate Express Acquisitions LLC, had a change of heart or encountered unforeseen circumstances that led them to ghost. While it's not uncommon for buyers to back out of contracts, especially in real estate, it can be particularly challenging when it happens unexpectedly.
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Livia Adams
Real Estate Consultant · Miami · Member since 2024 · 53 posts · 18 votes
2y
It sounds like they were wholesalers trying to sell this property but they couldn't find a buyer in time. I mean the name already states "Express Acquisitions"

Also usually what I put in our contracts is that in case that the buyer does not close that the earnest money will be released to the seller without further instructions to escrow required. It's essentially an automatic EMD release clause in your contract, so that you don't need to run after the buyers for them to sign the release. Because they could care less. They won't see their money anyway so they don't care if it's staying in escrow forever.

In the future I would do much higher Escrows and also add the clause to the contract.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Livia Adams:

It sounds like they were wholesalers trying to sell this property but they couldn't find a buyer in time. I mean the name already states "Express Acquisitions"

Also usually what I put in our contracts is that in case that the buyer does not close that the earnest money will be released to the seller without further instructions to escrow required. It's essentially an automatic EMD release clause in your contract, so that you don't need to run after the buyers for them to sign the release. Because they could care less. They won't see their money anyway so they don't care if it's staying in escrow forever.

In the future I would do much higher Escrows and also add the clause to the contract.

that clause wont fly in most markets title company will still want their cancellation and escrow disbursement form filled out and signed by both parties before they will release.
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
2y
Quote from @Jay Hinrichs:

Quote from @Livia Adams:

It sounds like they were wholesalers trying to sell this property but they couldn't find a buyer in time. I mean the name already states "Express Acquisitions"

Also usually what I put in our contracts is that in case that the buyer does not close that the earnest money will be released to the seller without further instructions to escrow required. It's essentially an automatic EMD release clause in your contract, so that you don't need to run after the buyers for them to sign the release. Because they could care less. They won't see their money anyway so they don't care if it's staying in escrow forever.

In the future I would do much higher Escrows and also add the clause to the contract.

that clause wont fly in most markets title company will still want their cancellation and escrow disbursement form filled out and signed by both parties before they will release.
I help our investor clients by drafting automatic release language for their contracts that we will follow. Clear title, clear breach + release of liability… I have no problem releasing.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Tom Gimer:

Quote from @Jay Hinrichs:

Quote from @Livia Adams:

It sounds like they were wholesalers trying to sell this property but they couldn't find a buyer in time. I mean the name already states "Express Acquisitions"

Also usually what I put in our contracts is that in case that the buyer does not close that the earnest money will be released to the seller without further instructions to escrow required. It's essentially an automatic EMD release clause in your contract, so that you don't need to run after the buyers for them to sign the release. Because they could care less. They won't see their money anyway so they don't care if it's staying in escrow forever.

In the future I would do much higher Escrows and also add the clause to the contract.

that clause wont fly in most markets title company will still want their cancellation and escrow disbursement form filled out and signed by both parties before they will release.
I help our investor clients by drafting automatic release language for their contracts that we will follow. Clear title, clear breach + release of liability… I have no problem releasing.

your the man !! our title companies still wont do that they make us sign escrow release instructions and both parties must sign.. For instance I get our deposits on our new builds released at foundation and framing.. its in the contract but the title company still insist on their forms and instructions being signed .. not a huge deal we docu sign both parties..
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Livia Adams
Real Estate Consultant · Miami · Member since 2024 · 53 posts · 18 votes
2y
Quote from @Tom Gimer:

Quote from @Jay Hinrichs:

Quote from @Livia Adams:

It sounds like they were wholesalers trying to sell this property but they couldn't find a buyer in time. I mean the name already states "Express Acquisitions"

Also usually what I put in our contracts is that in case that the buyer does not close that the earnest money will be released to the seller without further instructions to escrow required. It's essentially an automatic EMD release clause in your contract, so that you don't need to run after the buyers for them to sign the release. Because they could care less. They won't see their money anyway so they don't care if it's staying in escrow forever.

In the future I would do much higher Escrows and also add the clause to the contract.

that clause wont fly in most markets title company will still want their cancellation and escrow disbursement form filled out and signed by both parties before they will release.
I help our investor clients by drafting automatic release language for their contracts that we will follow. Clear title, clear breach + release of liability… I have no problem releasing.

Yes we never had issues with automatic release clauses. Because usually delinquent buyers will take forever, if at all, to sign such a release form.
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