Residential Real Estate Broker · Indianapolis, IN · Member since 2016 · 47 posts · 10 votes
Hello BP Community,
I have recently put a property under contract over the weekend here in Indianapolis, Indiana. The Title Company just began the title search earlier today. I'm not sure if the owners can legally back out or not but they said they contacted a realtor and hes saying that in the state of Indiana they have 72 hours to cancel it if they want to. Does anybody who's done business in the Indiana market know how true or false this actually is? Any help is greatly appreciated!
don't be that dick that files anything that clouds title because someone backed out a day later. You weren't financially damaged and it just casts a bad shadow on you and your operation. As a wholesaler, expect this to happen from time to time and move on.
I am no expert. Not even close. But it sounds like they are citing the attorney review period. If this is a deal worth keeping, it's sounds like you may want to pay 250.00 to sit with real estate attorney and get some rock solid factual information to protect your interests. I know that's not much of an answer but I saw no other replies. Best of luck with your situation
Had a seller do that once. My attorney made it clear the 72hr "cooling off" period does not apply to home sales especially since the sellers intent is to sell the house- although through a different route. I would have a conversation with the seller and try to work something out. Let them know you have an enforceable contract but want to find a win-win for each side. At the end of the day, it's not worth your time and mental energy doing anything legally with the seller. It happens.
You may want to consider the value of pressing the issue. As a buyer, you're dependent on the seller for certain levels of co-operation. If you'd like to avoid issues further on during the transaction, it might be wiser to walk away if they'll give back the earnest money.
There's something they are not comfortable with. A vacated deal might be better than a "shotgun wedding", y'know?
Nice speaking with you about the Memorandum of Purchase agreement. It is a good tool to hold a sellers feet to the fire if they try to back out of an agreement or go around you.
The federal 72 hour right of recession deals with "in home sales", where the homeowner is buying something, not selling their house. But, even if you might prevail, probably not worth the aggravation. See if you can work something out. The agent likely realizes they sold it too cheap.
Can't help but to wonder if they do in fact back out, list with the agent, cant sell in the time frame they need, only to call you back. I'm curious to know what they said their issue is and what the sellers situation is, if you'd be willing to share that with us.
@Michael Schaeffer@Adrien C.@David Dachtera@Andy Rumple@Wayne Brooks Thanks everybody for the input! I greatly appreciate it! I just got their call tonight and have less than 24 hrs to see if they can in fact cancel the contract so I guess I'm kind of panicking lol. Adrien I noticed you're in North West Indiana would this apply to Indianapolis also? I'm not too familiar with contracts and legal issues so I'm not sure if that applies to the entire state or not? I got the property with a $0.00 down payment so not worried about that. I just want the deal because it's a great deal. I'm also trying to create a win-win scenario for all parties. They are saying the reason they want to back out is because they are looking for a new property to live in but want to close on the property I have under contract before they move out so that they can use the funds from closing to purchase the new property. They said they have nowhere to go and can't sell if I can't make this happen. They mentioned this before they signed and I told them I would do my best to see what I can do and they didn't have a problem with it at the time and they ended up signing right then and there. Now if its indeed true that they can back out within 72 hrs that means I have until Tuesday 8pm because they signed Saturday at 8pm. But I'm not sure if they are lying or not about wanting to back out because of their situation maybe they just got a better offer? And it so happens that my partner @Jay Hinrichs (the one providing funds and buying) is on vacation in Paris so I just hope he receives my message in time so we can figure this all out.
don't be that dick that files anything that clouds title because someone backed out a day later. You weren't financially damaged and it just casts a bad shadow on you and your operation. As a wholesaler, expect this to happen from time to time and move on.
@Adrien C. My goal isn't to be a dick. Like I said I'm trying to create a win-win scenario for all parties involved. I've cancelled a contract with a seller before. The thing about this one is they already mentioned their situation and I told them I would do my best to do what I can and they didn't have a problem with it. They also mentioned on the phone earlier that they didn't have the money for closing cost and I told them before they signed that that money can be taken out of the purchase price of the property. So kinda seems they're just throwing excuses out there. They also had a previous offer on the property before I got to the property they just didn't sign yet (they even showed me the contract at the property). They called me up to see what I would have to offer first. That's when I went to the property offered an extra 5k on top of the other offer and told them that if I walk out of there without the deal that the offer was off the table. They was quick to sign after the entire conversation knowing the risk that I might not be able to close then let them stay until they found a house. If they had an issue with it why would they sign? I'm thinking that they went back to the other investor and got a better offer now trying to back out and just using the excuse of needing to find a new home first for me to agree with them.
@Adrien C. Oh ok! He called me and told me not to be a dick and just do it on anybody he already knew the situation. But I understand where you're coming from.
I'm going to be super honest with you. I've never done an investment deal. Hopefully soon. But I have sat through my own settlements were there were issues and It can be a nightmare. Sellers are often under a lot of stress .
This sounds like a case where you may get more with sugar. Offer to help them solve their problem... see if you can get them to open up to you about what the problem really is and maybe you can salvage the deal and come out the good guy. Problem solve for them. Yes I'm changing my advice from my original reply now that I realize you don't have any skin in the game. Do what's right and you'll never lose. If that doesn't work, email them a thank you letter saying "I'm really sorry we couldn't do business. I'll be here if you change your mind or if there is ever anything I can do for you. I wish you the best of luck in your new place". I say email for the purpose of time. The Point is communicate that sentiment to them as soon as possible. It's often said that sellers don't always go with the highest offer, sometimes it's who they connect with. My beginner advice.
@Michael Schaeffer Thanks for the input Michael. I've actually already built rapport with the seller and found out the problem. One of them being that they wanted to close on their time frame because they wanted to live in the property during Christmas. The second was the issue I already mentioned above about wanting to close and still live in the property until they find another house to move into. The third was they wanted me to pay for a dumpster rental while they are vacating the property so they can throw anything away that they don't want (they are hoarders). I've already agreed to close on their time frame and pay for the dumpster. They knew the risk of me maybe not being able to let them stay after closing. They still agreed and signed. Like I said I already built the rapport needed I spent a full hour at the property maybe more just looking at the property and chatting with both owners and their kids. I simply gave them a choice to sign now and if not the offer was off the table. The reason I did this was because I knew if I left without their signature they was going to go back to the other investor and tell him/her my offer. How do I know this? Because they literally told me that they had another offer on our first phone call and told me that they wanted to see what I had to offer before they signed the other contract. Then they showed me the unsigned written offer from the other investor.
@Tyler Shoaf I have two points. I think they might have already been made, but I will make them more clearly.
1) I do not think there is a particular rule allowing them to get out of the contract.
2) I would let them out of the contract.
Let me explain your other option.
a.) You give the lawyer or the title company the full purchase price.
b.) They do not sign the property over to you.
c.) You decide to file a lawsuit.
d.) They decide to counter claim.
e.) Six months to a year later you are on the witness stand. The first real question is... "Mr Shoaf have you ever discussed this transaction on a public website?" Three questions later you will be reading the part where you called them "hoarders". Then you will spend the next $20,000 in legal fees trying to explain to the jury that you did not know they were mentally ill and should not be entering into contracts.
Please do not tell me you are paying so far below market value that it will be worth the legal fees.
To me, the only way this could be worth fighting over is if you were needing the property for an assemblage.
Also you mentioned kids. Are these people elderly? In some states, adult protective services would get involved. They can simply make your life hell.
In NY, a seller cannot back out of a contract. There is no 72 hour period for them to do so. Legally the seller has to sell you the property and a judge will rule in your favor. I would contact a real estate attorney to review your purchase offer. They are the only one that can tell you exactly where you stand. Everyone on here (including myself) is just conjecture.
Did you deposit your earnest money into escrow or hand the seller a check? You might want to be sure you actually have a valid contract.
As for cooling off periods, this just sounds like more proof of how stupid real estate agents will say anything to get a listing. You are up against a commission ninja now, and the seller most likely wants to list the property based on nothing more than promises and BS, so you need to deal with this objection. It is nothing more than that and it is quite easy to handle.
As for pushing the issue, I have threatened a lis pendis before when this happened to me. No idea how to actually file one, but the sound of it was intimidating enough to the seller that he went forward with our agreement and we closed. You should read Robert Ringer's Winning Through Intimidation. Great book and it taught me how to ***** slap sellers back into reality when they eat to much of the BS that comes out of real estate agent's lying mouths.
A laundry list of excuses after a contract is signed by people with a hoarding issue may simply mean they are struggling to let go of the home the same way they struggle with getting rid of anything else. It's for torture for them...one episode of the TV show hoarders illustrates that all too well. All I can say is from a psychology perspective is that they most likely need to feel in total control to even begin to let go of the property . The feeling of letting go of the property coupled with the probability that they don't feel in control = where you find yourself right now. Based on all the other advice in this thread, only chance is to back off, wish them well, let them know you are there when they are ready if they change their minds. Follow up with them in a week. Some really good points about it coming back to bite you have been made. You want them to have a clear conscious and to feel good about the deal and it's certainly not worth the aforementioned potential legal ramifications. Tough one. They'll be more. Keep us posted please.
@Account Closed I can understand your point with the hoarder comment. I will say that they do not seem like they're mentally ill. Their son who is a grown man was also there listening into the conversation, reading the contract, etc to make sure that they weren't being fooled. They knew exactly what was going on. Also there were younger kids there and no way was I being a creep and all 3 grown adults who were present the entire time didn't think so either. Otherwise why would they sign the purchase agreement happily? I think you're going a little overboard with that comment.
@Aaron Mazzrillo We agreed on the contract to a zero dollar deposit so I didn't have to put anything into escrow. It's a valid contract I've done it this way multiple times. Thanks for the book recommendation I'm going to have to look into that.
I appreciate everybody's input on this. Before I back out of anything I want to see if we can still come to a win-win scenario for all parties including the seller. I will keep you guys updated and let you know how things go!
1. If you have legal recourse it would under" specific performance". Basically you get to hire an attorney, file a lawsuit ( not in small claims court) and force them to sell. Given the negative views most people have of flippers you may have a very hard time winning a judgment forcing them to sell. I have both won and lost specific performance non real estate situations and it is not easy or cheap so make sure it is worth the cost and risk.
2. The other issue you may face is regarding the enforceability of your contract. Judges typical do not look favorably on contracts that lack "consideration " . Each party must have, consideration , which means a detriment to the person who made the promise or a benefit conferred on the other party, both of which are measurable in economic terms. Since you provided a zero deposit, you face no detriment if you walk away. That could very well cause your contract to be considered null and void. now I am definitely not an attorney but I highly recommend you Google the 5 elements to a contract. ( Btw, I also use zero deposits so I am not saying you should do that but be aware of the risks involved.) This is the reason why at a closing no mater what you pay for the property the deed usually states $10. when I first started buying it was a dollar and raised due to inflation and increased cost.
My advice is either work out the issues or walk away.
Good luck and don't forget your next opportunity is out there waiting on you to find it.