What happens when seller signs multiple contracts? Is that fraud?
Hi Everyone,
I got a 1BD/1BA condo in Downers Grove, Illinois under contract for 15K on 11/4/2015. I put inspection deadline on the 18th and closing date of 25th. (Yippee! My first deal)
A few days after the contract was signed, the seller expressed that she wants to back out of the contract. I managed to talk her out of that idea at the time. About a week into the contract, she said that she has another offer from the past which reappeared and that is significantly higher and she needs to back out of the deal. While I was trying to explain to her we're under contract and I have to protect my investor's interest, she literally "ran" away while yelling "you can sue me but don't chase me". I tried to reach out to her since but she has been avoiding me.
Frankly, I had already mourned the deal and was ready to move on. A few days ago at a local REIA meeting, I learned from a fellow investor that I can get my contract recorded at the county to protect my interest since I spent so much time and effort on this deal. So I went ahead and got that done today (11/25).
While recording my contract, I learned from the county there's another contract also recorded. Buyer #2 has it under contract for 22K. It's accepted 1 day after mine and is set to close on 11/30. I looked up the buyer and it's another investor in the area so I gave him a call. He told me that he already had to deal with another buyer who also had this under contract. Buyer #3 apparently has it at an even higher number and accepted at a later date. Buyer #2 & 3's attorney had already spoke and agreed Buyer #3 will back out since Buyer#2 signed the contract first. I believe (and hope) I got the contract with the earliest acceptance date.
As this is my first deal, I'm not quite sure where I stand.
1. Do I have the right to buy it since my offer was accepted first? Or does Buyer #2 have the right since he recorded his contract at the county before me?
2. Would Buyer #2 be able to close now that my contract is also recorded?
3. Is the seller committing fraud by signing all these contracts at the same time?
4. Any similar experiences / comments / suggestions would be highly appreciated.
I tried to save a few bucks and didn't get an attorney from the get-go on this deal. I understand at this point I ought to be talking to one if I still want proceed with this. Just want to hear any thoughts from the BP community first.