Seller sold property to another party. I have a signed contract

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Seller sold property to another party. I have a signed contract

Raimonds Lauzums
Real Estate Investor · Sheboygan, WI · Member since 2015 · 19 posts · 3 votes

So I offered 6K on this dump of a house. The seller agreed, I sent in 1K earnest money, I have a signed offer to purchase, with the seller's signatures on it, as well as mine, but I never did end up closing. They kept pushing off closing because of "title issues." Some stuff happened and they kept trying to have me sign a termination of contract or something, which I refused to do so, I just wanted the property. Months go buy, and someone else buys the place. It's been about a year now, I still don't have my earnest money, the place has a for rent sign on it.

What should I do? Getting a lawyer to fight a battle, and having to pay thousands of dollars just for the ability to buy it, doesn't sound that good to me. 

Side note - it was an REO, and their 2nd sale price was about 14K, so I guess they wanted more money. Pretty scummy.

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
10y
There was no breach by the seller. Anyone who thinks otherwise has never done an REO. Not only do you have drop dead dates that would have terminated contract, particularly title issues, their addendum a always give them the unilateral right to cancel, for any,or no, reason. You didn't get your EM back because you didn't sign the release. You have no claim, or damages.
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  • Jim Keller
    Investor · Riverside, CA · Member since 2014 · 351 posts · 220 votes
    10y

    @Raimonds Lauzums

    I will tell you, letting time pass is not a good way to prove you have been damaged.  Add and attorney to your team, and for $100 dollars or so you may get a little bigger check.

    Or I would recommend you just move on and learn what "title issues" mean. Being unaware is a good way to go broke in this business.  Another idea is to call the asset manager that controlled the deal.  Tell him you would release the old escrow today,  You just "need" another project to buy.  Ask him for a few addresses he controls and you will help him get this bad that clearly his bank and escrow screwed up off his desk.  You "just want to help"  :)

    Good luck

    Jim

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  • Steve McGovern
    Professional · Lowell, MA · Member since 2014 · 232 posts · 223 votes
    10y
    Sorry you're going through this. The irony is that although you think "having to pay thousands of dollars" for an attorney is a bad idea, the other 2 parties clearly thought the property was worth the legal risk-- they were willing to risk their own thousands of dollars, a breach of contract, and loss of the asset over it, not to mention some sort of likely punitive damages since they were a lender and the property was REO. Review your docs, especially the dates; make sure that you have all the instances of when they contacted you for termination, and contact a lawyer already. Fact is that this has gone past real estate law because you were actually harmed. Therefore you can probably get Litigation Counsel on contingency and don't have to shell out the money up front . It's at least worth a consult. You'll likely find some crucial misstep was made somewhere on your part... A minor eventual lapse of a deadline or something but (1) it's better to know so you know what mistake to avoid in the future and (2) if everything you're saying is true, there appears to have been intention to deceive so all bets (for them) are off. Even better for you if it's a reasonably reputable local or regional lender who did this. Good luck.
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y

    Im very surprised to hear that you lost your EMD when the seller was a bank. I feel like there may be some details here that are not coming through.

    Also while you did not sign a termination of the sales agreement.....at some point you had to have had an end date listed in the initial agreement. I do not know Wisconsin law, but every state I do business in requires a contract in order to be valid to have a time frame listed in the contract.  So if you went beyond that date, the contract was no longer valid.

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  • Scott Schultz
    Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
    10y

    Sorry to say your fault was not signing the termination, Under WI law, one party cannot unilaterally send you your ernest money back, there has to be a directive agreed to by both parties. depending on the language in the contract, the bank may have the right to use your ernest as liquidated damages if you do not fulfill your end of the deal, but they have rights far outside of yours, if you dont have experience in REO deals I suggest you read all the docs. or have a Layer do it for you. I was a REO Listing Broker for 10 years, I have seen this situation, and generally it happens because the buyer does not comply with the contract.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y
    There was no breach by the seller. Anyone who thinks otherwise has never done an REO. Not only do you have drop dead dates that would have terminated contract, particularly title issues, their addendum a always give them the unilateral right to cancel, for any,or no, reason. You didn't get your EM back because you didn't sign the release. You have no claim, or damages.
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