Getting out of a sale contract

18 Replies

I am selling this property which was purchased at a tax lien sheriff sale, I signed a contract with one of those contractor guys who buys for cash, but he is not licensed and is just trying to sell it or wholesale it on the MLS, leaving me without any word on the process, The contract said they should have started the process of the Title search and notified me within a 5 business days and notify me within 20 days of any problems with the search, they did not start the search until 15 days from signing the agreement, then i sent an official cancelation he is accusing me of breaching the agreement and want to file a lien on the property for his right to buy?? is that possible to be filled?? please advise

I don’t see them not starting the title work as a breach.  If they do find a problem/objection to title, we don’t know what your contract says regarding you delivering clear title, or what other outs they may have.

Is he an actual buyer, or just trying to wholesale?

He is one of the buy for cash guys . trying to wholesale . and he suppose to insure the title . Because it was a sheriff sale . many title companies refuses to . but he is aware of that from the begining 

My whole fear he is wholesaling the property on MLS for double the money I am getting . and he is noy doing any work So far . if hus title does not insure it . I will lose my other actual buyer who is paying me 5k more

This guy also is not licensed as a broker or real estate agent in the state so I can complain to the commission and cancel the contract and he will be fined which I hate to do because of his business 

What do you think ? 

How can he wholesale it on the MLS? Is your contract assignable? He doesn't have to be licensed to buy your property It sounds like you are having seller's remorse and want to take the higher offer

@Ehab Tadrous what does the contract say regarding buyer assigning? Not to say he isn't double closing on the house, but most wholesalers assign.

What date is set to close on or before? If there are requirements in the contract that he is not fulfilling, you can try and call his breach, but it may not be that easy. Do you have a realtor or attorney involved? They should be the first calls to make.

Personally if I could determine wholesaling was illegal and knew he was wholesaling my house I would have the local commission on him asap. I would not be happy with a house I was selling to find out my "cash buyer" was unable to actually buy and just planned to list it himself on forums and Craigslist etc...

We still don’t know what your contract says....is it Contingent on clear title...yes or no. If you know you can’t deliver clear title, no sense in signing a contract contingent upon clear title. 

The contract is not contingent on clear title . it only says if the buyer does not agree on a cloud or lien or anything that clouding the tie they should notify me within 20 days of me receiving the title commitment . which should jave been done but not yet . and that commitment should have been done 5 days of signing the contract which was 08/14/2018 

The contract also says he can assign or relist it on MLS but he is not licensed some other broker did list for him

I spoke to the PA realtor commission to check his name if he carries any license and he does not. Then I told the case and they asked me to file a complaint because doing wholesaling without a license is illegal in PA 

This guy signed the contract with me on $27 k and he is selling it for $53 k . 

Even though the contract states that he is allowed to reassign it or list it but he is not licensed 

What do you all think of filling the complaint like why the commission asked me to do ??? 

It is assigned a closing date of 10/02/18 

I'm not sure if it is legal for him to list his "contract" on the mls, but he does not need a license to sell his contract. Now if he is listing or advertising the property itself, yeah that's a problem.As for the liens best to contact an RE attorney for advise on that.

Originally posted by @Account Closed :

How can he wholesale it on the MLS? Is your contract assignable? He doesn't have to be licensed to buy your property It sounds like you are having seller's remorse and want to take the higher offer

I agree on what you saying but another broker is selling the property on the MLS . NOT MY BUYER . AND WHEN I ASKED HIM HE SAID I AM GETTING INTEREST FRIM PEOPLE BECAUSE I AM REHABBING IT AND WILL INVEST IN IT .

@Ehab Tadrous  If I understand correctly you signed a contract with him to sell the property for $27k. When you saw his listing for 53k you thought to yourself "shoot he is making way more on this deal than I am".  In the mean time you lined up another buyer for $32k and tried to find fault with him and the terms to nullify the contract.  Why didn't you raise the issue of legality before signing?  Unless he fails to deliver on closing by 10/2 the contract is enforceable.  You signed a legal document and you should treat it as such.  You certainly don't want the reputation of someone who is not true to his words verbal or written.

I agree with @Dominique Pradel-Lewis If your selling your right to the contract then he’s entitled to the property after close. What he decides to do with it is his choice, he’s not acting as a realtor selling others properties so he doesn’t need a license (check local laws) and he isn’t at fault for attempting to sell his future property. He may specify in the contract or when contacted by buyers that it’s not available until specific date. As far as the contract goes, if he’s in breach which sounds like he is based off the way you describe it, and your contract states agreement is void if title commitment isn’t filed by day X. Then contract is void unless both parties continue to act as if contract is valid. Check your verbiage on the contract and if you think it won’t hold up contract a RE attorney. Usually the buyer has multiple outs in a contract but missing a deadline can kill a deal if written correctly.

@Ehab Tadrous I think you made some bad decisions and are regretting them now. 

So how do you move forward from here. 

You might see if he can sell it. If you have a title issue and can't get insurance, be happy he found a buyer sucker for you. You could make a formal complaint to the real estate commission. 

Presuming what he is doing is illegal, the contract is not valid. A contract for something illegal is not enforceable. But whether he is doing something illegal depends on what the contract states and in part what his intent was. The fact the contract says he can relist it on the MLS implies he never intended to close and is acting as a broker without a license.

The fact he has relisted it for double what you are getting does not  mean he will get that price or anywhere near it. The guy is probably a newbie. The fact he said he will file a lien against the property says he doesn't know what he is talking about. Yes he could file something but not a lien.  It is as likely as not he will not close on time and the contract will expire. 

Originally posted by @Dominique Pradel-Lewis :

@Ehab Tadrous If I understand correctly you signed a contract with him to sell the property for $27k. When you saw his listing for 53k you thought to yourself "shoot he is making way more on this deal than I am".  In the mean time you lined up another buyer for $32k and tried to find fault with him and the terms to nullify the contract.  Why didn't you raise the issue of legality before signing?  Unless he fails to deliver on closing by 10/2 the contract is enforceable.  You signed a legal document and you should treat it as such.  You certainly don't want the reputation of someone who is not true to his words verbal or written.

 Thank you, Dominique, I agree with you I will not ever need that reputation, but you thinking ideally from this buyers side, even though I am the most straight guy, just because when he presented at the property to show it for him, he checked from basement to chimney, and he persuaded me that he is an investor and will turn this mixed commercial property into a condo , he will just advertise it for this coming purpose , have his contractor come to check it and see what is needed to be done etc...,  in order to find tenants and get a high appraisal on it so he can recover his rehab money, LOGIC story right

eventually, nothing like that happened and he is fooling around never ever talked to me again after siging the contract and I call his title company and they never respond or every have this property set for search nor a contract or escrow money ..., then I get to talk to them when I sent a cancellation letter, they answered and said we are not obligated nor the buyer to tell you anything or when we want to work on the title or what we will do in the property

If you were in my shoes what do you think of this guy and his people, plus the property listed with a whole different brokerage does not even have a website or address 

who is the bad guy then ?!!!

Originally posted by @Ned Carey :

@Ehab Tadrous I think you made some bad decisions and are regretting them now. 

So how do you move forward from here. 

You might see if he can sell it. If you have a title issue and can't get insurance, be happy he found a buyer sucker for you. You could make a formal complaint to the real estate commission. 

Presuming what he is doing is illegal, the contract is not valid. A contract for something illegal is not enforceable. But whether he is doing something illegal depends on what the contract states and in part what his intent was. The fact the contract says he can relist it on the MLS implies he never intended to close and is acting as a broker without a license.

The fact he has relisted it for double what you are getting does not  mean he will get that price or anywhere near it. The guy is probably a newbie. The fact he said he will file a lien against the property says he doesn't know what he is talking about. Yes he could file something but not a lien.  It is as likely as not he will not close on time and the contract will expire. 

 Thank you NED, you always helpful and get the core facts about everything GOD BLESS 

Originally posted by @Tony Suniga :
I agree with @Dominique Pradel-Lewis

If your selling your right to the contract then he’s entitled to the property after close. What he decides to do with it is his choice, he’s not acting as a realtor selling others properties so he doesn’t need a license (check local laws) and he isn’t at fault for attempting to sell his future property. He may specify in the contract or when contacted by buyers that it’s not available until specific date.

As far as the contract goes, if he’s in breach which sounds like he is based off the way you describe it, and your contract states agreement is void if title commitment isn’t filed by day X. Then contract is void unless both parties continue to act as if contract is valid. Check your verbiage on the contract and if you think it won’t hold up contract a RE attorney. Usually the buyer has multiple outs in a contract but missing a deadline can kill a deal if written correctly.

 Thanks Tony 

Ehab Tadrous Did you request good faith deposit and the money wasn't put in escrow?  If that is in your contract then you may have a point.  Chances are the buyer told you one thing and trying to do something different unsuccessfully.  One way to get out is to read the contract carefully and find where he has breeched it.  

At this point it appears you are stuck waiting until the closing date comes and goes. Send him a formal requirement to close on the closing date, with a Time is of the Essence clause and wait it out. If he asks for any extensions or anything, deny them (assuming you can). That would be my play verse trying to dump him early.

I have a great idea....ask a real estate attorney who is also an investor that question, they will know better than anyone who is not a real estate attorney.  And you will be able most likely to find a real estate attorney in that area who will give you that answer for free.